How big should center spkr be to set to "large"?

The following applies to high resolution speakers rather than midfi gear:

Setting the center channel to "large" is better sounding regardless of how small your center speaker is because when you set your receiver/processor to "small", the receiver inserts a high-pass filter, usually steep-slope and not of the greatest quality, to remove the deep bass and protect your center channel. Having this filter in the signal path to your center will degrade sound quality noticeably if you have a very high quality center loudspeaker and equally capable electronics. Less revealing speakers and systems will not be as sensitive to the insertion of this filter because of the qualitative limitations of the speaker's own crossover along with the limited transparency of the electronics.

A good processor makes a world of difference, but I might recommend another setup technique that will help.

Set the delay on your center speaker for an additional 3-5ms. With most processors you have to lie about the distance your center is away from you (say it's 3-5 feet closer than it actually is) in your surround setup menu. Most people have either have their center channel too close relative to their mains, or haven't set up the delay properly on their processor. I have found that even when the center is equidistant from you as your mains, the soundstage depth is compromised and the center speaker doesn't blend properly. The additional 3-5ms of delay solves this, as would moving the center 3-5 feet back from what is normally considered the "proper" location.