My experience with narrow 26" tires in commuting is that they beat me up more than I'm willing to endure. I've tried 1.25" high pressure tires and didn't like the rough ride. 1.5" wide tires with high pressure work well - they offer decent compliance in the rough stuff but don't add that much rolling resistance.

My current commute bike is a Long Haul Trucker with 700C x 38 tires. I like this combination.

Of course if you're much lighter than me (I'm about 215 lbs), 1.25" (or 30-32 mm) tires may work well.