I grew up near there (in Milcombe, a small village just to the south west of the town, near the housing boom honeypot Bloxham).
Though I left nearly 15 years ago, and my folks have moved away in the last couple of years, I doubt much has changed.
MTBing doesn’t exist, unless you like slogging along bridleways at the muddy edges of fifleds. That said, it’s where I started out. The road riding can be very good, especially if you head off towards the Cotswolds, where the lanes are small and the villages pretty.
Banbury became famous a few years ago for being the place with the fastest growth in the UK, which came as a result of the M40 motorway being built right beside it, allowing much better access to Birmingham one way and London the other.
As with all market towns, the town itself doesn’t have an awful lot to say for itself, but the outlying villages can be very nice. There are some great village pubs to visit during the summer evenings – you may even get to play some Aunt Sally..!
In terms of where to live, it depends on whether you want to live in the town, or are happy to travel in. Note that public transport from outlying villages is pretty non-existant, so you’ll need to drive or ride. If it was me, I’d select somewhere nice with a decent pub (Great Tew – you can drink in my favourite pub, the Falkland Arms) and travel in and out every day.