Our master is on main and nursery is up - on the opposite side of the house. DD slept in our room in a bassinet and then RNP until 4 mos, when dd started daycare. We figured since she was napping in a crib at daycare, it was a good time to transition. She had 2 hard nights and then it was fine. She was waking around 2 times/night when she moved to the crib. The video monitor helped tremendously, even now. Sometimes she stirs in her sleep and goes back to sleep quickly. I would hate to go up and down the stairs for false alarms.
We have a guest bedroom across from the nursery but I have never broken down and used that bed. I liked knowing it was an option though.
As for the kids on main and master up, some people are worried about the security of having kids on main (easier to jump in a window on the main floor than 2nd floor) or get out of the house with a kid without you knowing. It all depends on your own security and your area. I would be ok with dd being on the main floor and me up while she is in her crib and non-mobile but after she can get out of the bed on her own I would personally be more concerned with your situation.