So I found that whole bit rather interesting, and wanted to break down all the possibilities. Here's what I've got based on the available choices/branches:
- Phase 1: Choose if the Thalmar biatch gets to stay or leave. Kicking her out pleases the Stormcloaks, letting her stay pleases the Imperials.
- Phase 2: Markarth is given to the Stormcloaks. This seems unavoidable, as there is never a dialog presented. This turns the favor toward the Stormcloaks side, which then triggers followup options to give something to the Imperials.
- Phase 3: You must give up either Riften or Dawnstar to the Imperials. Giving up Riften pleases the Imperials, giving up Dawnstar pleases the Stormcloaks.
- Phase 4: Imperials want compensation for a battle at Karthwasten. Giving it to them pleases the Imperials, denying it pleases the Stormcloaks.
- Phase 5: (optional) This phase will only appear if the 'balance' is uneven and one side is displeased. If the Imperials are displeased, you have an option to give up WinterHold proper (College stays neutral) to the Imperials. If the StormCloaks are displeased, you have the option of giving up Hjaalmarch (Morthal) to Stormcloak control.
I ran thru what I think were all the options just to see what the various results would be. The quickest and most neutral path to agreement and balance I found was this:
- Phase 1: boot Thalmar biznatch
- Phase 2: (auto) Stormcloaks get Markarth
- Phase 3: give up Riften to the Imperials
- PHase 4: Allow compensation for Karthwasten
Doing that kept both sides happy and neither were complaining. However, it did not seem clear if upsetting one side mattered at all - on my first time through, I totally sided with the Stormcloaks 'wants' on all avail options, and while the Imperials were super grumpy about it, it did not seem to stop the mission from completing the same way.
Ultimately I guess it just boils down to the player choice of which cities you would like to see under which control. Does having Maven Black-Briar as Jarl of Riften make any difference aside from the RPG side of it? I am not sure.. maybe someone else can answer that Q.
*note: if you still have the quest to "Find evidence of Ogmund's Talos worship" when going into the peace council, it will auto-fail at the end, no matter which choices you make - presumably because Markarth has now changed hands no matter what. There may be other quests that are altered based on choices, but I did not see any in my own log change.
*note: if you finished either side of the Civil War quests, then the peace council wont even be part of the questline.