Well, Larger is better in a sense. Because of the the larger OD, the boundary layer formed will allow for better flow. However, some case can't accomodate the hose..especially if you are trying to watercool everything (cpu,gpu, chipset, ram).
Another problem is the turns (elbows). 10:1 ratio is used for turns if you really want to reduce pressure loss. So if you had a 1/2 hose, the radius of the turn should 5 inches. If you had 1/4 hose, you would only need 2.5 inches radius. (This ratio is what we use for Fluids class for ideal situations, it's just a rule of thumb we went by.)
Maybe the guy at FrozenCPU thought you were talking about a pump. Or maybe the pump in the system isn't really powerful enough to move a lot of volume.
For future reference, there are a LOT of things to consider when trying to design the perfect setup. The greater the temp differences between the water and the cpu, the boundary layer flow across the water block(turbulant is better), the surface area of the fins in the water block, the length of tube, the amount of head pressure loss across the system, the radius of turns (elbow), amount of turns, the list goes on....
http://www.systemcooling.com/ does a very thorough job of their reviews when it comes to systems and waterblocks.