In general, when defining materials you want as few seams as possible between contiguous surfaces like the body. Sometimes designers will separate the head or face from the body to gain more detail in that area. Size of UV islands (in the same material) should be somewhat balanced by the amount of actual surface the object is using unless it's a really important element like face or eyes where close ups will want for more visual detail.

You should not have overlapping UV islands in the same material.

-K