I have the small in several colors and it is the perfect size. I've not seen the larger size but feel it would be way to big for me. I'm 5'4 and 112 pounds for reference.
I use the regular (large) because it's one of my school totes so I need it to fit my laptop or a notebook/textbook/iPad. On a small frame it does look oversized but it all depends on how a person carries themselves. Decide what your primary function is for the bag, what you'll be carrying and using it for, and definitely try both styles out in-store if that's an option.
I think it depends on what you carry every day. Personally I think the small is a great size for every day. But if you're carrying a lot. Or maybe larger items like a laptop the larger size might be better for you.