This paper addresses some general issues related to the difficulties and uncertainties during the assessment and characterization of micro and small-scale wind-based generation in urban areas. This paper proposes four generic wind turbine models, which could be used for the analysis and selection of optimal wind turbines in target applications, as they accurately represent the range of wind turbines currently available on the market. The analysis in this paper compares results for the expected annual energy outputs and cost-benefit analysis obtained using steady state and dynamic wind turbine models of actual and generic micro/small wind turbines, applying both low-resolution and high-resolution measurements of available wind energy resources. The presented results demonstrate the significance of the accurate assessment of wind resources in urban areas, as well as the importance of the correct modeling of wind turbine characteristics. It is shown that substantial errors, typically overestimating wind turbine performance, are obtained if standard assumptions and current recommendations are used for the analysis of wind turbine performance.