If it's running a standard 44-16 gearing, there's a good chance that it has a thread on freewheel. Freewheels smaller than 16 teeth aren't known for holding up very well. The micro gear look that a lot of freestylers run these days is accomplished with a cassette style rear hub, and cassette hubs are expensive. You can't change just the sprocket, because it'll screw up the gearing. It'd be like a mountain bike, permanently stuck in the easiest gear.
If you're lucky, and it already has a cassette hub, and just needs a driver and sprocket. How the cog/driver comes off is going to depend on the brand of hub, but will most likely require a lock ring tool and possibly a chain whip.
The only real functional reason for the smaller gears is to help keep the sprocket and chain out of the way on some tricks. It's also a little lighter, but not enough to get the racers to switch over. Small gears are mostly a freestyle thing. There's some debate over different gear sizes giving more torque, even when at similar ratios. The fact is that larger gears are more efficient because the chain doesn't have to bend as far, but it's a really minute difference that won't effect any but the smallest riders.