I have read the large case, cool temp idea as well.
I think with the proper air flow paths the opposite should be true, except
at start up when the air inside the case is a heat sink.
Hmm I dispute this, but larger cases allows for some distance between heat generating components. It is like having 3 radiators next to each other which increases the overall heat because they are aiding each other. This means more air is needed to move this extra heat away. Also smaller cases block a lot of airflow, you may think designing a good design/path for air to go in and then straight out. But reality is different with small cases, there are so many obstacles in the way. For example, you have a intake fan at the front-bottom. A AGP/PCI card + Hard disk may block a lot of the air needed to reach the HS and then out. Larger cases flow through quite easily not just through the large gap but also over the AGP/PCI cards.
There are other points too.. Like custom mods are much easier to do to make it quiet, components has more breathing room too etc..