interesting posted by Bezza on December 11, 2007 at 11:32 AM
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You reduce a lot of unsprung mass with a lighter wheel / tire combo, which means your suspension will work much better.
Plus, with every inch larger the rotational inertia increases because the mass is concentrated more to the outside, even if the mass is same between the smaller and larger wheel
Some guy on MX6.com (can't find the post) figured out how much lighter you have to go for each inch of increase to give you the same rotational intertia.