I don't know that the super small wheels are strictly necessary for bus travel, although I suppose it does depend a little on what kind of bus you are on and whether you are comfortable storing your bike down below.
I have a Montague, a folding bike with full-size wheels, and I take it on city buses all the time, even when it's crowded (it's still smaller than a lot of stuff I see people on the bus with).
It's a great bike for commuting too - after the bus, I have something of a longer ride, so the larger wheels are really great - I've tried the smaller wheels, but I just feel like I'm spinning like crazy.