Yes, a 700c tire is good enough for road and light trail use. You would not want to regularly take a pair of narrow light weight racing rims on light trails. You can do it but I would not expect the wheelset to last as long as they should. There are plenty of touring/cyclocross type wheelsets that would be better suited to light trail use.
The 26" rims are typically wider and stouter than 700c rims. The low pressure, wide, tall tires that you can mount on the wide rims will absorb more shock and not roll as easily as high pressure, narrow, low profile tires.
You did get it right. In your analysis. You can ride with either tire. If you plan on doing more rough trails than road riding, I'd recommend the 26". If you think you will be mostly on bike paths and the occasional trail, with the trails being mostly relatively smooth hard pack the 700c will be fine.
Last edited by masiman; 03-09-08 at 01:03 PM.