This animation shows the differences between 26″ and 29″ wheels, of course eliminating the riders influence to concentrate on the actual difference the size of the wheel makes.
26 inch / ISO 559mm
26-inch clincher tires (with inner tubes) are the most common wheel size for mountain bikes. This tradition was started initially because the early mountain bike pioneers procured the wheels for their early bikes from American-made bicycles rather than the larger European standards in use. The typical 26-inch rim has a diameter of 559 mm (22.0″) and an outside tire diameter of about 26.2″ (665 mm).
27.5 inch / ISO 584mm / 650B
27.5-inch mountain bike wheels (which some also refer to as 650B use a rim that has a diameter of 584 mm (23.0″) with wide, knobby tires (~27.5 x 2.3 / ISO 58-584) are approximately the midway point between the 26-inch (ISO-559mm) and the 29-inch (ISO-622mm) standards. They carry some of the advantages of both formats, with a smoother ride than a 26 inch wheel and more stiffness and durability than a 29″ wheel.
29 inch / ISO 622mm / 700C
“29-inch wheels”, which also conform to the popular 700C (622 mm diameter clincher) wheel standard are becoming more popular for not only cyclocross bikes but also cross-country mountain bikes. Their rim diameter of 622 mm (~24.5 inch) is identical to most road, hybrid, and touring bicycle wheels, but are typically reinforced for greater durability in off-road riding. The average 29-inch mountain bike tire has an outside diameter of about 28.5″ (724 mm).
While hotly debated, there are advantages and disadvantages to both the 26-inch and 29-inch mountain bike wheels sizes. This overview (from Performance Bicycle) will help you decide which wheel size fits your need.