Narrower tires and higher psi does not automatically mean faster... tires need to be inflated so that they deflect by about 15% of their depth to be most effective and the aerodynamic difference between a 23 and a 28 is very small.
A wider higher volume tyre run at proper pressure will absorb shocks better and you will be hard pressed to push these to the limits of their handling... if the psi is too high your tyres will not absorb shocks, traction will be decreased, and you will have a higher probability of the tyres skipping off objects which can be very bad in high speed turns.
With better made performance oriented 26 inch tyres you have compounds that roll fast, have a small contact patch when they are run at the higher limits of their psi range, and casing shapes to maximize traction in corners.
Most fit individuals can ride at speeds around 30 km on any reasonably aerodynamic set up and tyres will not play a significant role unless you are running at much higher speeds.
Weight does play a small role as well but even then, the difference between a light weight racing tyre and a good commuter tyre may only be as much as half a bottle of water and as commuters usually carry more gear and aren't all lycra'd up wider can often be much better.
Come summer I will run the 700:35's on my hybrid but for winter the more massive rubber and deeper tread really makes life easier and my commuting times have not been impacted too much by the cold and weather and my wider tyres.
Last edited by Sixty Fiver; 12-21-10 at 12:10 PM.