We actually place the head of the outboard between the mast and the side of the bunk. Its very secure there - doesn't move no matter how we're heeled. We do have a larger outboard than most. Its an 8HP Tohatsu with a super long shaft (not just a long shaft - its an additional 5 inches longer than a normal long shaft). Its very heavy too, around 65 pounds, and is a bear to remove and replace on the transom. In this location it might be a little farther forward than optimal but I think that its better than under the cockpit.
About 20 years ago I was on a small MORC boat that actually had an outboard bracket placed high on the mast in the cabin. The outboard could than be affixed there. It was out of the way and it was upright which helps keep the fuel reservoir from emptying. Ours does if you place the head of the motor below the prop.
I would love an inboard. Yep, its a lot of weight. I'm interested in the Saildrive 330 by Arne Jonsson Boatbuilders. Its actually the head of a 15hp Yamaha outboard attached to a saildrive unit. Weighs 110 pounds. Looks like it would be pretty easy to install myself. The only hard part would be getting it aboard (probably need a crane or gin pole or something similar. Go to:
http://www.saildrive280.com/ for more info.