Tires: Tire size effect on gas mileage, gas mileage, fuel efficiency

Question
Disregarding the effects of increased weight and drag, how does a larger tire size (greater diameter) effect fuel efficiency?  My friends think that larger tires would decrease city mpg and increase highway mpg.  I think that larger tire size would decrease both city and highway mpg.  Who is right?  Any help is much appreciated!

Answer
Scott,

There are way too many variables.

The gearing on the car would change slightly, and that would tend to favor more MPG - unless the car was geared such that the paricular speed was the optimum for the enigne.  But the acceleration would be slower, so people tend to use more throttle, canceling out the advanatge that might be there.