This spring I've been test riding a 26" wheel Sogreni city bike, and some readers have asked what I think of the 26" wheels - specifically, do I find the handling sluggish and do I think the frame could fit a 700C wheelset. The answer is that I do not find it sluggish at all, and believe that the 26" wheels were a good choice for this frame - allowing for aggressive front end geometry with no toe overlap. The bike is pretty fast and maneuverable, and I do not notice the wheel size at all.
Back when I was riding a Pashley Princess and describing the handling as slower than several similar bikes I'd tried, many expressed the opinion that this was due to differences in wheel size. The Princess is fitted with 26" wheels, whereas the other bikes I compared it to were fitted with 28" wheels. Despite a few contradicting voices (most notably that of Jan Heine), it is commonly believed that larger wheels are faster, and that it is always better to use 28" or 700C rather than 26" or 650B, unless the builder/manufacturer is trying to achieve something specific with sizing or clearances.
While I cannot contribute scientific evidence to the wheel size debate, personally I am comparatively indifferent at this stage. I've ridden fast bikes with 28" wheels, 700C wheels, 650B wheels, 26" wheels. I've ridden slow bikes with 28" wheels, 700C wheels, 650B wheels, 26" wheels. Recently I tried a very cool 26" wheel roadbike, made by Richard Sachs for a local cyclist. I would need to put it through a real road test to really comment about it, but around the neighborhood I could not discern any difference in handling, any hesitation in accelerating, compared to a 700C roadbike. And the proportions work so nicely for a cyclist of shorter stature, maybe even for someone my height. I am surprised that shorter women getting custom frames don't go for 26" more often.
Folding bikes and mini-bikes suffer even more from the small wheel bias. Just the other night a friend was telling me that he finds the idea of a folding bike convenient, but cannot imagine the small wheels being adequate. Having ridden Bromptons on a number of occasions now, I disagree as does the Co-Habitant. While I am sure that some folding bikes are slow, it probably has more to do with how the bike itself is designed than with the small wheel size. To me, the 16" wheels on a Brompton feel no slower than full size wheels. I have also spoken to cyclists who ride Moultons and Bike Fridays with dropbars as their main roadbikes, finding them more than adequate for club rides and pacelines.
I am not saying there are no discernible differences between wheel sizes, all else remaining equal. But in the scheme of things, there are so many other factors affecting speed and handling, that I feel the importance of wheel size is disproportionally stressed. It seems to me that getting the tubing, geometry and positioning just right for a cyclist of a given size should be the primary goal, and the wheel size should be a function of that - not the other way around. I am open-minded about smaller wheels and would like to try more bikes with them.