McCain has asked for a series of town hall debates with Obama. I personally like the Town Hall debate style so long as CNN doesn't plant questioners with trivial and demeaning questions they wrote.
However, Obama is a good debater both in town hall situations and in formal moderated debates. Yes, he had one bad debate, but that was the ABC moderators' obsession with trivia, not his performance itself. The thing is, McCain is only good in the town hall format. 
Clearly, Obama should insist on several forms of debate, not just the one that shows McCain in his best light. McCain, however despicable his policies, is someone that people find likable and engaging. He connects with people on a personal level in some way. In town halls, he seems frank and honest. In more formal conditions, he is ill at ease and seems at best, inauthentic. More importantly, he seems dishonest. 
Obama has no need to avoid town hall debates. He does well in them. Just don't let McCain shine at every debate by allowing them to be in the only format he can shine in.