Originally Posted by rruff
I'd err on the side of smallness... you end up with a slightly lighter and tighter frame (front wheel tucked in a little more, better weight balance), and there really isn't any downside. Put your seat at least as far back as KOPS, then position the bars for comfort... which may take a few tries. If your seat is far enough back then you'll have little weight on your arms, and a long reach should feel comfortable. If you like a high bar then get a 17 deg stem and flip it up.
There is a tradeoff which ever way you err...if erring is even an appropriate term because sizing conventions vary. Competitive Cyclist's fit formula puts that somewhat into perspective with their different sizing ranges.. Depends if you race versus tour for example and whether your priority is comfort versus aerodynamics. It is no coincidence that all ballon tired bikes have high handlebars. They are designed for comfort not speed. The tradeoff when choosing a smaller bike is a larger fall from seat to handlebars because smaller bikes have shorter head tubes. That is incidentally why bikes have been sized historically by seat tube because seat tube for the old convention of horizontal top tube bikes was proportional in length to head tube which shared approximately the same converging angle to the ground. The other thing with a small bike is toe overlap. If you have big feet and longish cranks at 175mm or so and you are on a small bike and turn the wheel sharply your foot can hit the front wheel. The next thing is wheelbase. Longer wheelbase bikes tend to be more stable at speed. So there are many tradeoffs to consider. My belief is you should err on the side of your so called ideal size based upon your condition and riding preference. Bigger if you want to tour or ride recreationally and smaller if you want to race.
HTH,
George
P.S. Thanks Dave for sharing your website and expertise. I ride a bike just a hint above your recommendation more out of choice and handlebar height then convention.