For modification of your existing water fixtures to use grey water to fill and flush a toilet, putting the sink over the toilet, or even any modification of the fixtures themselves, is unnecessary. Modification is still possible, many pedestal sinks do not actually require the pedestal, and can be mounted directly to the wall. This could allow mounting over a toilet if desired, though the options will vary depending on the specific fixtures used.
For the proceeding example, I will assume that you are working with a system that you have complete control of, and authority over, such as a single family home. You may be able to discuss these options with the community, if you live in an apartment or similar system, as implementation would require group approval, but the benefits would still apply.
You would want to start by changing the drainage path from any grey drains, sinks/tubs/washing machine for example, to drain into a holding cistern, rather than into the septic/sewage system. You could divert downspouts from your rain gutters to deposit into the grey water cistern as well. While a single bathroom sink may not have enough overall drainage to supply a single toilet with adequate quantities of water, the grey cistern will have a much greater chance of meeting the demand. This will leave you with only black water drains entering the septic/sewage system, thereby providing use of the same water twice before discarding, and as such greatly reducing your water usage.
You may (should?) be able to collect more in the grey water cistern than is needed to provide a supply for your toilet needs. This cistern may also be tapped for other uses such as watering the lawn and garden, washing the vehicles or building exterior, and so on. Grey water could ferment, if left in the cistern too long, so a drainage option should be included as well.
I would suggest finding reading specifically relating to grey water systems before implementing a project, to better familiarize yourself with the setup, as well as potential hazards. Jay Bazuzi recommended Art Ludwig's Create an Oasis with Greywater, and from the description it appears to be a good place to start. There are many books on the topic, and the more you read the better you will be prepared. You might also be interested in researching 'Humanure' while you are at it, as a way to recycle the black water drains as well, providing a possible third use of the same water; as well as increasing food production, and further reducing septic/sewage load.
Some other things to consider are the possible impact of the following:
- Fecal matter reaching the grey water, e.g. cloth diapers in the washing machine.
- Urine reaching the grey water, e.g. urinating in the shower.
- Cleaning products in the grey water, and their affect on plant life, if using to water the lawn/garden.