True, the smaller the sidewall on the tires, the faster they're going to be, and they will chunk less, but they will be less forgiving.
With a larger sidewall, you have more side to side flex in the tire, so you have more forgiveness in the tire, but they can chunk a lot easier.
Generally, you will find a diameter that you like for racing. But for practice, run them big so you get as much runtime out of them as possible!
Also, truing them can mean you can "overdrive" your car a bit (or underdrive) which means driving your front wheels faster than the rear (larger fronts vs. smaller rears) - this makes your car more "positive" through the turns - the fronts pull your car through the turn very nicely. With my nitro car I usually run about a millimeter of overdrive. . .works very nicely.
RC10L2.5W - RC12.4 - RCNTC3(bmi) - TC4 (modded) - B44.2 - plus rent-a-rides! :D