I've never had problems with small microwaves. I didn't microwave much before kids, but you're right, it comes in handy with kids. With a newborn it's hard to find time to cook for yourself on a stove, so you can quickly warm up a can of soup, etc. and later you can heat up leftovers for kids.

I had a 0.7 cu ft microwave when I lived in an apartment. It was spacious enough and worked fine. Now we have a larger one and it works just the same.
I only use it for heating/ defrosting and can't tell the difference.

We're looking into getting a small countertop microwave for our walk in pantry (it has cabinets and a regular countertop). We rarely ever microwave things, but we're TTC so I figure with kids we'll need one.

We're looking at 1.1 cu ft ones. I heard that bigger ones cook better. Is this true? I've never had a microwave work better than another, but was curious if anyone else had opinions or suggestions.