why would a smaller diameter be better ?
Jeff,
Microphones are just like speakers. Larger microphones (in general) have more directionality then smaller ones. The difference is that speakers want to control all frequencies, where as an omni mic wants to have control over none of the frequencies. The idea of a omni mic is to represent a point source in space, so it needs to take up a little space as possible. If your microphone is physically large, compared to the wavelength it is capturing, its response will vary greatly with the arrival angle of the wave.