How high are your faucets? Are you planning a shelf between the sink and mirror? That will set the lowest placement of the mirror. Do you want to center the mirror at eye level or put it at the lowest point? You don't need much mirror space above eye level. A really tall mirror may just end up having most of the surface high on the wall where it does no good.

We're doing a medicine cabinet perpendicular to the sink (technically a 6' T x ~ 20 W cab that projects 6" into the room -- we can't recess because of pocket doors). It's a variation on a newer-construction solution that works for our old house space. [Seriously, I can't think of a 1980s+ typical development house that DOESN'T have that set up!] So obviously I think that solution is fine; it's never bothered me when visiting people and I don't think it's any more inconvenient than moving/leaning over to access a cab above a toilet...and I've had THAT set up in another bath for 6 years.

We have a single sink in a 45 inch wide vanity and chose the Kohler Verdera 40" x 30" with 3 doors. We also inset it which was very easy to do and the quality is real good. Just remember one thing. If you are going with a taller faucet, make sure the cabinet doors will clear the faucet, both when turned off and on. That applies to any size cabinet and seems like a no brainer. But even after discussing it, our contractor's workers managed to screw that up and we had to go hunting for a shorter faucet or start re-doing drywall again.

Well, a 20 will give you about 8 inches each side...the larger one will give you four. Traditionally, medicine cabinets were small back then, but I don't see any reason not to have as much storage room as you can have...but since it's a guest bathroom, plus you have a vanity, you don't need to maximize storage. Since I'm being tons of help, can you show us a pic of the vanity you chose? Maybe someone else will chime in...