I think I'd actually prefer a healthy mix of both private and (smaller) group lessons.
Back in college, we did nothing but group lessons. Usually 3-4 people in a group, the usual nose to tail thing, but our trainer was fantastic and we got plenty of individual attention. And then while we were walking/trotting, he'd give us little horsemanship quizzes, lecture us on colors, breeds, disciplines, history, etc.
Now that I'm getting back into riding, I've done nothing but once-weekly private lessons for the past 10 months or so, since group lessons aren't offered at my barn.
What I miss most about group lessons is the peer pressure. Knowing that while you may not be 100% comfortable doing ____, someone in your class probably is. And you do it anyway, so you're not *that* person. It's like an extra little kick to get you motivated. Plus, private lessons get a little stale when you do them all the time. Right now, that's the only way I can ride at all is in private lessons. While I do like the individual attention, sometimes it would be nice to have a little less attention and have some space and time to figure something out in my head before being called on.
If I could manage one private lesson a week and one group lesson, that would be ideal. But that would mean splitting my lessons between two barns and I'm not sure I want to open that can of worms just yet.