Given the same model of tire and the same overall tire diameter (properly plus sized), the handling is very close. Tirerack has done some testing that I cannot find right now that showed very little performance difference between a 15" combo to a 18" combo. In theory, lower profile tires will have less sidewall flex to provide more traction (flat contact patch instead of rollover) and better steering response. But given a good high performance tire, the performance differen in the real world is small. However, there are key benefits for upgrading the size. The link below gives them, but they only matter if you are using apples to oranges comparisons, larger wheels that are lighter than current ones, higher performance tire than what you currently have.
http://www.tirerack.com/wheels/tech/perform.htm The biggest probem I see is that there are not too many very high performing tires in 14" size. Most manufacturers are making their best perfroming tires in limited large diameter tires.
IMO, the sweet spot for most mid-sized cars is a light 17" wheel with 40-45 series tires. Great performance, good looks (most cars need to be lowered, though), and little worry about bending the rim on every expansion joint.
Aaron
