I'm 5' 2.5" just like you. I have four bikes:

* Bike Friday Pocket Crusoe folding bike - 20" wheels
* Aegis Swift carbon racing bike - 46 cm - 650c wheels
* Two mountain bikes - 26" wheels

I used to have a Terry Isis with a 700c wheel in back, 24" wheel in front, but sold it.

I wouldn't ride a bike with 700c wheels. Why? Because in order to get the short top tube length I need (i.e., ~19" on a road bike), I would have to have too much toe overlap with 700c wheels. I do have a little bit of overlap even on my 650c wheels, but none on my other bikes (nor on my Terry). I know some short gals put up with it, but I'd rather not. It has almost caused me to fall a couple of times on my Aegis (like when turning sharply at slow speed). To avoid toe overlap in a bike with 700c wheels, the top tube would have to be too long for me. I'd end up having to use a super-short stem, which can lead to handling issues. If you are longer in the torso than me (my inseam is around 28.5" for comparison sake), you might not have this issue.

The only downside of smaller wheels is that you have to make absolutely sure to carry a tube and patch kit, or two tubes, as most others you ride with will not have the same size tubes if you get a flat (or heaven forbid, two on the same ride, which happened to me once with my 24" Terry tire!) And, there aren't as many colorful tires available in 650c sizes. Other than that, I like 'em just fine. I think they look better proportioned on small bikes too. 47cm and smaller bikes with 700c wheels look kinda funky to me. Then again, I know a lot of folks think Bike Fridays and Terrys look funky, but I kinda like being different.

Bottom line: Don't get too hung up on tire size. Buy the bike that fits you well and inspires you to ride!

Emily