I stated in When 16 is not So Sweet that there appear to be two camps for everything cycling related -mountain bike wheel size is no exception. 26" wheels has been the standard since the dawn of time and have been proven as a reliable and quick setup. According to cycling legend Gary Fisher, the reason 26" wheels were used was due to the fact that they were plentiful from the cruiser era and you could get knobby tires in that size; not because they were deemed to be the optimal off-road diameter. In the bigger is better camp, 29" wheels rule and provide some distinct advantages over their smaller diameter cousin. Wikipedia provides a thorough dissertation on the history of mountain bike wheel sizes and arguments for and against each standard.
These are better rolling over and through obstacles, larger contact patch for braking, turning and climbing and a more stable ride through loose terrain. My experience with 29" Gary Fisher bikes is that they are more forgiving and faster because they allow you to maintain momentum through the course. They are essentially 700c wheels with big knobby tires wrapped around them. I am not the fastest rider out there and have a tendency to pick really bad lines through the baby head rocks in Riverside State Park. But because I am riding a 29" wheel set I am not punished (other than verbally) as badly as I would be on smaller wheels. I just roll through it and hope to do better next lap.
There are a couple of myths that people like to toss about regarding 29" wheels that need to be busted. The first is that you have to be a "tall rider" to appreciate and utilize the larger wheel. Tell that to Emily Batty who at 5'2" just smoked her competition in the Sea Otter Classic on a Trek/Fisher 29er and not by just a little bit. The geometry and handling of Trek/Fisher 29' bikes benefit all riders at all levels period.
The second myth relates to greater rotating mass at the outer diameter, so they they are harder to turn, slower to accelerate in sprints, out of turns and up hills. The physics don't lie, there is greater rotating mass, but Trek/Fisher have compensated for any associated issues with very innovative frame and shock combinations. On the flip side, greater rotating mass is less susceptible to deflections and decelerations so it still enables it to be a faster bike since you can carry more speed over the entire course on average.
Physics aside, the only way to validate these claims is by riding bikes with of each wheel size on the same course on the same day. Trek Factory Demo Day provides this very opportunity on May 20 and 21 at the airstrip in Riverside State Park. As a bonus, the 24 Hour course will be marked that weekend for those who want to get a few practice laps. Stop by the shop for more details.
In the meantime, the debate rages.