Adrian,
On my R20 with 406 rims I have a Redline BMX crankset that is 165mm, this gives me about 3 inches or 75mm clearance, I find that is enough, but maybe an inexperienced rider may not. I will be in the near future changing these for a very nice 145mm set I have for more clearance and the 165s will go to another R20 with 451 rims.
Just remember that a 34/50, (compact), set up on a full sized bike gives it lower gearing, so on a 20" wheel you will find it very low, maybe too low? If you search Bike Friday's website you will find that the gearing on their bikes that match a full sized road bike is something like 60/48 unless it's got a Capreo system. On my R20 single speed I'm using a 58t front ring and 14t rear, this spins along nicely at 30+ kmh, but is too low for much higher speeds.