I think what the Americans call 29" is sometimes called 28" in Europe. This is the same size as 700c. Should be easy to find good rims, reasonably easy to find tyres.

26" is standard MTB wheels, stronger for a given weight (or lighter for a given strength) than 29", also the equivalent tyre will be a little lighter. I wouldn't say 26" is too small. You could go either way and still be fine. The 26" will be a little lighter and easier to find off-road tyres for; the 29" will maybe roll over things easier and maybe go a bit faster on-road with narrow tyres. I would choose 26" (standard MTB) myself, but my experience with off-road stuff is pretty limited.

For road, though, you will want a slick tyre (same goes for 29"/700c wheels - on the road you can put on a hybrid/touring tyre and save the fat knobby tyres for off-road).