I'm going with Digest size. I like it, and it provides a feel similar to many other OSR products. So far, I've got 39 pages of stuff, not including formatting, art, or the OGL (which will likely suck up several pages). I'm not sure just how long this book will be to make it worthwhile for Lulu, but I'm guessing it will have to be at least 70 pages with art, etc.
I'm also probably not including the city setting. Instead, I will have a section on city encounters that can be dropped in anywhere. I think that would provide more utility. This would also allow the entire book to be OGL.