What Cam said.
Two examples of the intertia situation. The big wheels and low profile tires seen on alot of imports actually weigh more than the stock setup and have more weight farther from the center of the wheel. On an intertia chassis dyno they'll show lower horsepower readings. Not because the engine generates less horsepower with different wheels. It just can't spin them up as fast. They do, however, translate into a performace loss.
Second, alot of years ago there was a guy, Koffel, who raced a small block Chevy powered Lincoln in one of the lower gas classes. He went to a 60, and I believe 75, pound flywheel. Once he staged and got the RPMs up (don't know how long that took), he'd sidestep the clutch and, BANG, he was gone. Hard on driveline stuff, but he did quite well.