As an owner of a 17" PB, I attest that it is not too big to carry around every day. Is it bigger than a 12"? Yes, but it's honestly not much bigger than the 15.
I love my Powerbook and don't regret purchasing it for a moment. It is a wonderful, wonderful machine. Until I owned a notebook computer, I had no idea how useful it is to own a computer that can go with you anywhere. Forget about taking out of the house, to have it on the couch or anywhere you'd like it to be is quite handy. I never thought that I'd want another immobile machine.
However, if I were buying today, I'd get the Dual 1.8 G5. In my opinion, you cannot ignore the major power difference. Until the powerbooks get significantly faster, I can't recommend one to someone who doesn't feel that they need the mobility of a notebook.
The main drawback, in my experience, to having a portable machine is that you begin to try to take it everywhere. I end up with my powerbook on short trips and I haven't used it once. Yet, I take it anyway.
In short, you won't go wrong either way, but my advice is to buy the PowerMac.