Wheel & Tyre Sizing

Accurate speedometer readings depend on the total diameter of the wheel-and-tire assembly, which can be calculated from the figures in the tire size, although for comparing the effect of tire size on speedometer readings, the tire profile is more convenient to use. To calculate the profile (the distance from the wheel rim to the crown of the tire), multiply the first figure in the size by the aspect ratio, assuming the aspect ratio is a percentage.

For example, if the stock tire size is 185/70, 185x70%=129.5, so the crown of the tire is 129.5 millimeters from the wheel rim. If you put 185/65s on the car, the profile is going to be 185x65%=120.25mm, a difference of 9.25mm. If you put 195/60s on it, the profile will be 117mm, a difference of 12.5mm from stock.
The equation is pretty easy.
S * d2 / d1
Where S is the speed your speedometer is giving you, d2 is the diameter of your current tires, and d1 is the diameter of the tires used to calibrate the speedometer.
Like I said, it's really pretty easy. The circumference of the original tire is Pi*d1. Suppose the new tire has a circumference Pi*d2. So the ratio (Pi*d2) / (Pi*d1)=d2 / d1 tells you just how much larger. (Subtract 1 and multiply by 100 and you've got it in percent.)
Or alternativly you could click
http://www.paspeedo.com/calculator.htm

We used to have customers coming in all the time who had installed larger wheels to cure the "brake problem" in the corolla and complained that speedometers were incorrect. We finally had to send them memos and inform each and everyone of them personally when they came in for service.
Another rule of the thumb which people usually overlook in a race tune and that is, bigger tires usually have the effect of a gearbox with "taller" ratios and smaller wheels have the effect of a "short" ratios. Keeping this in mind you should emphasise more on "tread pattern" and compund of the tire rather than big fancy rims.