I've done a 700C to 26" on my wife's Redline Conquest Sport and she was very happy with it. Her bike is very small (44CM size) and the smaller wheels got her standover where she wanted it and look more proportionate to her bike. I used MTB wheels and mechanical disk brakes. Redline used a 132.5 compromise rear triangle so MTB hubs were fine and I run 1.25" cyclocross tires so there is plenty of clearance.
Obviously your mileage may vary and it's worth looking for a 26" specific frame like the aforementioned Surly or a Rivendell. Alternatively consider something that can run 29" MTB wheels and tires since you can get 1.9-2.0" sizes and studs