I have two bathrooms with towel rings in that location (and toilets to the left) and both have outlets in similar locations. I took a folded hand towel (to simulate looping over the ring) and hung it so the towel hangs just above (maybe .5-1") the countertop. I really like having the hand towel there. It means that no one is crossing the room with dripping hands or potentially dropping a towel in the toilet (if I hung it over the toilet instead). I don't think there's a right or wrong answer, it just depends on what looks and functions well for you.

Scootermom - in answer to your question, I use the Bounty "Select-a-Size" paper towels, which I like because sometimes you only need 1/2 towel, or maybe 1-1/2 towels, so I like the versatility. As I noted in my post above, I have the Perfect Tear towel holder (linked above to BB&B). The Perfect Tear holder works equally well for the Select-a-Size or the whole-size rolls. Korney19 - LOL! I'll link a pic of the Famous Dave's PTholder. Fun in the restaurant, but I wouldn't have one in my kitchen which I spent so much time and money to look beautiful! Here is a link that might be useful: Famous Dave's Restaurant PTholder

Julia - Just a tip - If you try to search on GW for something like "where to put the paper towels," it doesn't always ( or ever) work. Try going on google or bing and search for "gardenweb where to put the paper towels" and a whole list will come up. You don't need it now because laughable gave you a great link, but for any future searches, it's the way to go. I can't even find my own posts if I use the GW search. Try it for something like " gardenweb where to keep the onions". You'll be amazed. And you'll get great ideas for where to keep the onions.

I've never seen those before, but they do look nifty. Years ago I bought a couple of these stainless steel V-shaped ones. They work great, grabbing the towel tight enough so they don't end up on the floor, yet they don't damage the fabric. Pic is from Wayfair's website: