When I was growing up the closest place I could be taken to see steam engines in action was Middleton Railway (Google Maps recons it's a 3.5 mile, nine minute car drive from my parents house).
The railway opened in 1758 using horse drawn waggons to pull thousands of tons of coal a year from the Middleton Colliery into the heart of Leeds. In 1812 it moved from horse drawn waggons to became the first railway in the world to successfully use steam locomotives in a commercial environment. Middleton Railway also has a more recent history of firsts when, in 1960, it became the first completely volunteer operated society to run passenger services on a standard gauge railway. For a more detailed history see the societies own history page.
Furness Railway No. 20. It was built in 1863 by Sharp Stewart & Co. of Manchester making it 149 years old and still going strong (although it has had numerous bits replaced in that time). A perfect visitor for the 200 Years of Steam gala event.