Just like MA (miniv) said, small does NOT necessarily mean dwarf.
That being said, I think many breeders are extra careful with their tiny ones, to observe the two prospective parents for ANY outward signs of dwarfism as a hard birth for a tiny mare is disastrous, often. (that being a dwarf foal which was obviously deformed and those deformities make it hard for her to get the baby out b/c she's so small and/or the baby is oversized b/c of dwarfism problems).
The problem with dwarfs is that they were intended to be taller, normal sized or at least not as small as they are since they are afflicted w/the gene that causes dwarfism.
Therefore, they are built like a smaller horse, but have bigger genes, so for example, if a 28" mare was afflicted, she may have been INTENDED to be 32" and when she goes to have a foal, whether it is afflicted or not, it will be much larger and bigger structured, making it hard for her to expel the foal.
Another factor noone knows for sure, but I suspect is that some forms of dwarfism cause deformity of the structures which would affect the birth such as hip/pelvis, making a restriction even more likely. This is just MY OPINION I have no medical training, nor do I have any other basis on which to base my opinion other than observation and reading.
If both animals are structurally sound, conformationally correct and have no obvious signs of their proportions being off (such as a dramatically larger head or very short legs for the body/long back), then it will likely be alright.
Myself, I would be quite nervous about the 26" mare, and would make it a point to have a vet close at hand for the birth. Chances are, all will be fine, but I think at that height (again opinion only) there is a pretty significant risk something could go wrong.
Overall, I'd gauge the bone structure on the horses, but again, that's just an opinion.
Also, because you have seen something on a website as someone else's herd sire or whatever, does not mean it would be suitable for breeding, etc.
This person needs to educate themselves as to the risks they are undertaking, of course, as in all breedings, anything can happen, but the majority of breeders are quite careful how they choose the pairings. It's just so horrible to hear of the ones that come out badly no matter how hard we try, and we only get one chance per year, sometimes less, to get a foal.
I hope none of this offends you or your friend, just observing and hoping to help you both make a good choice for the little ones.
Liz M.