Definitely want the axle for the idler gear to go across, otherwise it will shake loose / skip teeth / add friction. If you have clearance issues, a different wheel could be used. Lego parts 3482 (wheel) and 3483 (tire) clear the axle with that gear spacing.
More wheels:
http://isodomos.com/Visual-Parts-Helper/Lego-Wheel.html
Here's a tiny LEGO swerve drive I made ages ago, using the differential gear piece as the swerve body and bearing. It drove around fine, but in the end they're still tiny plastic parts and can't handle a lot of load.
http://www.chiefdelphi.com/media/photos/28935
http://www.chiefdelphi.com/media/photos/28936