I am 4'10" and I have a Lightspeed Bella XS with 650c wheels for my road bike. I love Bella. She fits me. I had flat bars installed because I wasn't comfortable with the brifters and I kept shifting when trying to brake. Now that I have ridden her a couple of years, I believe I could handle drops and may switch back.

I have been trying to find a new commuter bike and was about to get a 44 Bianchi Volpe with 700c wheels. It felt good in the reach and everything but standover height. There was no room and I had to lean the bike over to stop/start. I was commuting home a few weeks ago and going down a very steep hill when I had to make a drastic defensive stop. I realized then that 700c wheels were out of the question for me. I would have been seriously hurt with the Volpe had I had to make that stop.

Do not let your lbs dictate what feels best for you. As you can tell, we don't have many choices in bikes because of our height. Find one that fits you the best, but at least try 650c wheels to make sure it isn't the best fit for you. Just my 2cents....