Originally Posted by Brian Ratliff

Some facts:

Tires at the same psi will have the same area contact patch. This is basic physics. Pounds per square inch, multiplied by the area of contact, gives you the weight the tire is supporting.

Larger tires at the same psi as smaller tires give less rolling resistance. Rolling resistance is proportional to the circumference of the tire contact patch. For the same area contact patch, the smallest circumference of that contact patch is a circle. Larger tires have a more circular contact patch than smaller tires, so larger tires give less rolling resistance.

On a perfectly smooth surface, higher psi inflation gives less rolling resistance by decreasing the contact patch area, thus decreasing the contact patch circumference. A marble will roll longer on a wood floor than a bouncy ball.

Why have small tires? Because smaller tires can support higher tire pressures. Higher pressures on smooth surfaces give low drag.

Why have larger tires? Because larger tires can support lower tire pressures. Lower pressures on rough surfaces give low drag (suspension effect).

Small tires have minimum pressures due to the carcass deflection leading to pinch flats. Larger tires have maximum pressures due to the tension force on the carcass tearing it apart or blowing a clincher tire off the rim.

If you are riding a smooth velodrome, small tires (19mm is most common) at very high pressures are best (most are 160-200psi). If you are riding very rough roads (cobbles/gravel, for instance, or off-road cyclocross/mountain biking), large tires (30mm+) at low pressures are required (most are 30-60psi). In between is in between... hence the popularity of the 23 and 25mm road cycling sizes. You can still inflate to moderately high pressures of 100-120psi, but you can maintain some suspension effect.