Niche sites for me, But then some people might consider them medium sized. I like to diversify my risk
I like smaller sites with more targeted niche. Easier to see if it's working or not, and where to improve.
I kind of think you need to diversify like some of the others have said, niche for the near future but the larger sites for the long haul. I agree too that the niche sites are much easier to adjust and improve to make them profitable.
When you create one site that you put hard work into then you have an asset to sell. Sure, you could eventually sell your niche sites that make a couple of bucks a day individually, but how much could you possibly get for it. With one site that generates a good stream of money, you have something to sell if you need the money for a future investment. Think big, not small potatoes. The most successful bloggers all agree with this theory. The niche site tips that you read about are usually written by people that make pennies a day. A few are successful, but most of the tips you are reading come from people that aren't making any money.
I think I agree with badar. A quality site might take a while to build but it would give long lasting income.