With everyone of my babies (I have 4 children) there was just something magical about decorating the baby's room. If you can fit the office in your master bedroom by all accounts do it. Getting a space ready and beautiful for your baby is one of the sanity saving activities especially once you start getting baby gifts and when nesting sets in. But on the flip side, each one of my babies slept in a bassinet right next to my bed the first few months. Word of advice: although the fancy bassinets are beautiful and quaint a pack n play with a built in bassinet and a changing station is way more practical. And they are useful for travel even after baby is older.

Make the guest room in the basement and the nursery upstairs, next to your bedroom. You'll sleep better that way. :)

Is there any way to combine the office with provision for overnight guests? think about your husbands work habits - if he will be up late working / early then it is best to provide a space separate from sleeping. He can likely work around the occasional guest, but I would rather not have papers, whirring electronics, faxes/scanners/etc. in the place where we need to relax and sleep.

Using the sitting area of the bedroom for baby is a bad idea too - after a temporary period when you want them nearby so you can nurse at night and still sleep a lot, they need their own space so they learn to sleep through and you need the space to rest and connect with dh. Take the room nearest yours for the nursery, and rework your guest accommodations. There are sofa beds, large chair+ 1/2 that open into twin size beds, - things he will enjoy having in his office day to day.

Getting a nursery organized will make being new parents much less stressful. It doesn't have to all be together, but babies take a lot of gear, and just having an organized place to house the equip helps you keep your sanity. congrats! have some fun searching nurseries here on houzz - designing a space that is personal - lovely.