I have a 15" laptop and find that being in coach (which I am most of the time it seems) and watching a DVD is no problem. I set the laptop, on my lap and if the person in front of me reclines I then tilt the bottom front of the laptop up and adjust the screen so I can still see it. That way it does not hit the seat in front of me.
I can also type for 15-20 minutes this way w/o any real problem.
I think a 12" laptop would be just fine.