I use 4" pads for the entire car often, as it allows the PC's power to be concentrated. The smaller pad also accepts more pressure before the pad begins to bog down, which means you can generate more heat. IMO it's much more effective method.
The first reason I switched to a 4" pad and 3.5" backing plate was that my Elise hardly has a flat surface on the entire body. The smaller, flexible pad allows the buffer to move more freely and conform to the curves. It's easier to get into tight spaces.
Another benefit I've noticed is that when applying LSPs with a finishing pad, you don't waste a lot more product than you would with a regular applicator.
After becoming comfortable with the smaller pads, I started using it on my sedan, and that has gone well too.
Haven't found any disadvantages yet. Perhaps you can do large panels faster with a larger pad, and perhaps more evenly, but it hasn't bothered me. Open to hearing opinions though.
- J