I think Cerewa got the clearest explanation.

Regarding gearing, what usually happens is that if you were to use 44/14 on a 700c bicycle, you are likely to use 44/12 on a 559 (26") bike. Either of these set-ups would require the same kind of effort level; you would travel the same distance per crank revolution and therefore you would travel at the same speed.

Two factors that weren't mentioned yet:

1. In either case, get slicks. This is the best thing you can do to improve performance and reduce noise level.

2. Do you have another bike? If so, size standardization might be good. For instance, I like the fact all my bikes use 700c tubes and tires. That way, I only need to carry one spare in my pannier. And when I move from the tandem to the single bike, I don't have to worry about having the wrong tube size, for instance.