I'm a bike commuter with only a couple years experience, so I'm still figuring out what my "ideal" bike is. Fortunately my wife is the understanding sort, and so I can use my "dad allowance" part of the budget ($35 every two weeks) to do the experimenting.

See pic. This is my bike. It started out as a 16" 2007 Novara Big Buzz. 700c, flat-bar aluminum disk-brake urban hybrid. At this point I've not changed... the wheels, tires, drive train, front fork. (New fork is in a box in the living room.) With the new Nashbar frame (great sale when the only size they have left is yours) which otherwise fits me much better - I have a really bothersome toe overlap on the fender. It's not so bad on the commute, but since this is my "everything" bike, when I'm riding with kids or other slow (and reasonably often) occurrences, it gets to be a real hazard.

I've done some hunting around, and it seems like bikes which are designed for my height/reach (5' 6", calculated effective top-tube ~50cm) are running 650c wheels to maintain frame geometry and reduce toe overlap. Some of the bike models seem to be running very similar frame geometry, but switching between 650c and 700c somewhere in the size line.

So here's the question. What are the hidden obstacles behind swapping my current 700c wheels for 650c wheels? The conversion itself seems fairly straightforward; get 650c disk-compatible wheels and throw them on the bike. But is this going to abnormally lower my bottom bracket ground clearance? I won't have to deal with brake adapters since I'm using disks, but are there any other gotchas?

Thanks!