Just for fun:
lets say my brother has a bug   " really a toyota truck'"
 with 31 inch off road  tires and the tire store says he will get better miliage if he slaps some 29 inch tires on the rims..

Will he  save gas?  

SC

Sometimes it is true that a smaller tire gives you better gas milage. (as in this case, larger than stock but smaller than whats on there) As Toyota has developed there vehicles for fuel economy already. When you throw these big tires on the truck, yes, the engine is turning less rpm at the same speed, but there is a line where it takes more foot into the gas pedal to motivate those big tires, thus decreasing fuel economy rather than improving it!
Big Joe

I did some research,   and one thing I read was that the smaller tires will give you better city mpg but high way  mpg may suffer if you reduce diameter..  
Your Speedometer  will be whacked

As Gehackd  is saying.  it takes more power to get the bigger wheels turning  from a stop then the smaller wheels. Once the wheels are turning this diff is not so much .

 One post said he put 50 pounds of pressure in his tires and got a 10% or so mpg improvment. but he warned not to do this with old tires as it will separate the tread..  Which i understand is a not so good thing at high speeds.
Also I figure the tires may explode if it is real  hot on a summer day

My brother in Boston has replaced his worn out cool lookin fat truck tires with more tame looking smller diameter street like tires.   I'll call him today and see how this great experiment is working for him.    SC

50 lbs ?   Is the tire rated for that kind of pressure ?    Sounds a bit high for a Toyota unless its a big truck like a Tundra. I would say it would be a dangerous to exceed rec. pressure from the manf. New tire,old tire. :roll:

Here are old tires