This is a question I've wondered about. I'm guessing that, assuming both riders have the same muscle mass percentage, the 165/20 rider will have the advantage. It makes sense to me that your muscles are already using energy to propel themselves along with everything else, and the bigger rider will have more muscle mass to do that with, so it would even out until you bring the weight of the bike into it.

I'm sure it's much more complex than this, and I'd like to see an answer by someone with real knowledge on this.