I don't own one yet as I was dithering over which size to go for, but a friend has the medium and I've tried both the medium and small. There's loads of YouTube videos comparing the two - I thought this one was really good:Anyone got a YSL medium Lou Lou that can give me a little review? please
I do like a bigger bag, I always carry around too much stuff that I probably don't need (gotta love anxiety overpreparing you for everything) so I thought the medium would be ideal. In all honesty, I found the medium to be quite heavy and bulky and just a pain in the a to carry. It just didn't fit well on my body no matter how I wore it, and I'm 5'7 so I imagine it would overwhelm you if you were shorter. I know some people like the oversized look but I value comfort more!
You can actually fit quite a lot in the small if you're out and about during the day or for dinner/evening events. No you wouldn't be able to use it for work or uni and fit a laptop/books in there but I wouldn't use this bag for that sort of thing, I'd go for a tote or something roomier. The small looks stunning too and fits so well just under my shoulder. You want your bag to be comfortable and with the medium I just felt like it was swinging around and getting in my way, and that was only after a few minutes so I think carrying it around all day would seriously get on my nerves.
There's not much in way of price between the medium and small and I do feel that the small should be nearer £1.5k but hey. The Loulou is really beautiful though so ultimately it'll come down to your own preference and what you want to use it for and comfort levels when you're carrying it!