I see the 20 years as being the time required for Luke to grow into an experienced Jedi and to start rebuilding the order. I see it as the length of time required to find his sister. I see it as the length of time required by the Rebel Alliance to muster the force needed to defeat the Empire once and for all. I see it as the length of time required to turn the tide of popular opinion, as the ordinary people of the galaxy will have been force-fed Imperial propaganda for more than 50 years by the time Episode VII begins.
I like this approach and can see the twenty year gap working if handled appropriately.
Luke tracking down his sister: not only her, but finding other Jedi Knights who survived the purge perhaps? Maybe having to fight them to prove his worth, or even kill their leader? Just some more vague ideas for the Sequel Trilogy.
As for the Sith Lords, do you have any ideas on their characters outside of Vader and the Emperor? I'd like for Darth Maul to be featured one way or another, for instance. Would more than just Vader and Palpatine exist after Episode III? I would imagine so. How would they impact the Galactic Civil War?