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Is there any (in game) reason why they prefer that humanoid form (Sanguine and Sheo at least?).

they can choose whatever form they like.

as for sheogorath, he never appeared as a breton as far as i know. if you refer to the madman in solitude in skyrim, i think thats just one of his followers

i dont think theres any particular reason for them showing up as a specific race, they were probably just picked randomly

Sheo and Sanguine are both Bretons in Skyrim. The madman is a wood elf.. totally different form.

Sheo's always appeared as a well-dressed old man of ambiguous race, the Breton thing is probably only gameplay.

The fact that Sanguine chose a Breton disguise that time he bamboozled you into reenacting The Hangover (fun quest) is probably a coincidence.

Fair enough. I just started wondering if they had a fondness for the Breton race, for some odd reason.

Sanguine appears as a breton because he's trying to have his fun with mortals while undercover (it's notable that, once he reveals himself, he appears as a Dremora-like creature).

As for Sheo, game mechanics. Sheo's always been depicted as a human, and his race is likely only a matter of beth getting his appearance right.