I have both the recessed lights above our vanities and wall sconces flanking either side of our mirrors. I like the versatility of both; I use the recessed if I'm just in there to wash my hands or brush my teeth, but add the wall sconce light when I'm spending more time in front of the mirror, brushing my hair or applying my makeup.

Be careful with recessed lighting overhead. Remember putting a flashlight under your chin telling ghost stories? You get the same shadows, only from above. :(

Always a good idea to go with multiple levels of lighting in every room. In a bathroom, that would be recessed ceiling (LED) and wall sconces at the vanity. Maybe a chandelier over the tub.

A recesses light above the bath vanity would be a good idea if there is light at other angles to blur out any ugly shadows that may occur. For example in the picture below the recessed lighting works well as there are two to even out any sharp shadows.

(pardon our work equipment this is a project in Studio City)

Another good idea is to find a fixture that distributes lighting on all sides such as this one.

(This lighting fixture in particular has texture, but it does not need to be that way)

Not if it's the only light source. I usually design recessed lighting in the center of the bathroom and put sconces either above or on the sides of the mirror(s). The light is more flattering that way and doesn't give you shadows when applying make up.