whats better for racing, smaller or bigger wheel and tire size?

Wider tires usually mean more grip. More rubber on the road the more traction.

I figured, thanks!:)

all depends on budget and application. looks like you have an e30 :D. you can actually do great on 15's and then just put an r-compound on them. makes it very affordable. most of my e30 m3 friends run r-compounds on 15" wheels.

there was a group buy on some light weight 15's e30 specific that you may be interested in. PM me for details.