Gerry,
I have not found any negative handling consequences of running 18" wheels front and rear, but my riding was restricted primarily to racing in the past decades. I know that most of the racers feel that the handling improves tremendously with the smaller wheels.
I think the real issue is style. Few owners like the look of the small wheels that tend to get lost in the capacious mudguards. In general, the rear is usually fine, but the front mud guard could do with some work. I use a smaller aluminum guard and lower the attachments under the balance beam to suit. I also got rid of the front most mudguard stay. It is your choice.
Bill is correct that you should look at the spring eyes for the rear spring boxes. If they can be screwed a few threads in on both ends that can get you a bit of lowering. Short front spring might be useful if you have a stock Girdraulic. It can help the handling and braking while lowering the bike a bit. You should always check your footrests for best ground clearance after changing the running height of the bike.
David