If it's working, it's working. I'm using a canister and I have the input and output set up on the same, short side of the tank. I shoot the output to the right along the back wall, and everything then gets circulated towards the bottom front corner where the intake is.
I had a tough time with the output shooting the water from back to front. Seemed like I never quite got the filtration I wanted. I think a circulator in a 29g is appropriate, if only because of the height of the tank compared to its length. You don't want stagnant water anywhere.