But, is a 29-inch wheel "better" than a 26-inch wheel? Hard to say. Certainly, the 26-inch standard is arbitrary, simply being the original size of the fat tires when mountain bikes were first pioneered back in the 1970s. But the 29-inch sizereally just another way of identifying a 700c wheelis in itself quite arbitrary, its origins to some degree lost in the misty past of cycling. No one seems to have done any real empirical study as to what the ideal wheel size would be. I'm willing to buy into the idea that a 29-inch wheel rolls better in some instances, something that might be particularly useful for downhill riding. But it's also going to be heavier than a 26-inch wheel, perhaps meaning greater fatigue on long rides, plus lesser acceleration.
That said, Fisher makes a nice-looking bike called the Dual Sort 129 ($1,430; www.fisherbikes.com) that has 29-inch wheels, a nice mix of Shimano LX and XT components, disc brakes, and a Manitou shock. It would be a MASSIVE upgrade over your Hoo Koo E Koo.