I think the cut of the skirt can have a pretty big effect. I'm the same height as Sarah and my inseam is 31" which is freakishly long for a petite. I almost always buy my skirts above the knee, and I actually like wearing mini skirts (not micro-mini, but like so): http://www.whitehouseblackmark.....38;inSeam=
I know it seems weird to be self conscious about my thighs but totally comfortable in a mini skirt, but if it's A-line it's perfectly fine, and the rest of my legs are quite nice if I do say so myself.
BUT I have to make an exception for pencil skirts. I don't know why--it probably has something to do with the way they accentuate the hips, but for some reason I need those to fall just below my knee. I suspect the same is true for you. Otherwise it just becomes a hip-hugging piece of cloth, and doesn't narrow out at the bottom the way it's supposed to, which isn't flattering.
If a skirt has more volume, like an A-line, I usually let it fall about mid-knee or just below as well. Somehow I feel like showing my knees in a more voluminous skirt makes me look like a little girl.
