One would have thought that track bikes, with their steep angles and short wheelbase, would be the most likely to have toe overlap, yet it's on these very same bikes that this can cause a fall for an inexperienced rider while attempting a track stand. I just checked the bikes I have together to see how they stack up. All three are on the "small" side at 21" c-t, a Jeunet track bike, Nishiki Ultimate road bike and a Nishiki Landau set up for touring with fenders. Only on the Landau was there slight interference between the toe clip and the front fender and the worst that could happen would be damage to the Esge plastic fender. As it came from the factory with no fenders, there was about 1" clearance, just like the other 2 bikes, but I suppose if a frame is built with fender eyelets, one should expect somebody will install fenders. Be that as it may, I never have found this marginal fender clearance to be a problem in actual riding. So in conclusion I feel that it's quite possible to build small, if not the smallest, frames without toe overlap unless the builder considers a tight, upright frame to be more important. Even with toe overlap, nothing really bad can happen because it would only come into play at extremely slow speeds or standstill.
John Betmanis
Woodstock, Ontario
Canada