im a generac installer and service tech. I wouldnt touch a generator placed indoors UNLESS IT WAS UL RATED for indoor use, and those are mucho $$$$.
Personally, i dont install diesel units for one reason..i get messed with by EPA unless i create a diesel containment zone under unit. To do this to there specs is crazy expensive. If someone contacts me requesting diesel i dont bother with bid. I tell them why and let them contact a commercial installer.
As far as size goes, it depends on actual load against panel. Ive been able to get alot of heavy electrical dependant homes to work on a 22 kw air cooled unit using Generacs wireless load shed modules.
These modules allow the heavier duty loads to cycle on 15 seconds apart to spread out the start loads. They will also automatically shed them if the gen gets below 50 HZ. You can also set them to never run the perticular item if the generator is running. This feature is great for shutting down redundant water heaters or supplimental electric heat strips.
Ive been able to operate a large house with 400 amp service on a 96 amp generator without any issues.
But i do run into the occasionsl client that wants everything.... Including heated gutters, heated driveway and heated towel bars to run. For them, i use the 48KW QUIETSOURCE. If they have the money, ill supply it.
Then theres one guy with a 130Kw unit with 3 x 200 amp transfer switches.i was told that during the last power outage that lasted him 7 days, he was having his propane tanks filled every day. That unit sucks down between 11 and 22 GPH Depending on workload. Yeiks.