Recessed Toilet Paper Holder

Styles
There are a plethora of different recessed paper holder styles.  Your choice of a unit depends on your spatial needs and on the general style of the room.

For a very small bathroom space, you may want a more deeply recessed holder.  These units are set so that they are almost flush with the wall, perhaps jutting out only a half inch to an inch.  While saving on space, these are often a bit more expensive and a bit more difficult to install than other designs.

Other units have a shallower recess, usually only two or so inches deep.  While taking up a bit more room, these can provide easier access to the toilet tissue.  These sometimes come with a curved cover, much like an awning for the roll, to protect the paper from drip and also to make for an easier one-handed tear.

Common metal finishes for recessed toilet paper holders include chrome, brass, stainless steel, and brushed nickel.  The main thing to remember is that your want a metal that with not discolor under the moist circumstances of the bathroom and that will not show many finger print smudges.

There are also many holders in different woods.  Moisture can be a wood fixture's worst enemy, so be sure that there is a sufficient stain on the wood to protect it from warping or cracking.

Installation
Installation of a recessed toilet paper holder is fairly simple.  Most products will include instruction, but here is a basic breakdown of the process.

First, make sure your placement does not cover a stud in the wall.
Using a dry wall saw, cut an appropriately sized hole in the dry wall.  Remember that it is better to under cut than to over cut.  You can always shave a bit more off to fit the holder; adding material to what has already been cut gets a bit more complicated.
Set the fixture into the hole.
Affix the fixture to the studs.  Appropriate screws should be provided with the fixture, but if not, consult a hardware specialist to find the right ones.  Some fixture require no screws, but instead have a locking mechanism that snaps the unit into place.

More information on Toilet Paper Holders