Which rate is the best rate to go by for Bitcoin prices There are so many exchanges and local exchanges out there. If I want to buy a bitcoin, how do you decide which value to go by? Some of these exchanges vary from few dollars to $200 difference. I know that it is always fluctuating and many times eventually balances out but how do you determine the price that should be paid?
Mtgox's price is high because it is difficult (if paying a 5% "emergency withdraw" fee) to impossible (if not paying a fee) to withdraw USD.  This makes USD on Mtgox less valuable than cash in hand, and therefore bitcoins are worth more in terms of "Mtgox USD" than real USD.

BTCChina's price has been high recently due to huge demand in China and capital controls that make it difficult for arbitrageurs to move USD or CNY out of the country.

When deciding on a fair price, it is best to use the price someone would get if they used the most convenient exchange in their country.  In the US, Coinbase or Bitstamp's rate makes sense.  In Europe, Bitstamp is the best option, and in China, a Chinese exchange would be more appropriate.