My wife has THE smallest hand. Finding the right fitting brake has proved to be a nightmare.
She had avid mechanical discs with speed dial 5 (IIRC) levels. I even replaced the limit screw with a longer screw from the hardware store so we could really get the levers in closer (search the WL for this thread). She could now reach the brake lever OK, but the brakes were to grabby and unpredictable (avids are not self adjustable) - basically you could get them to work, but as the pads would wear down, the brakes would bottom on the handle bar.
Anyway we tried the Avid Juicy brakes. They are adjustable such that they fit her hands, so we bought them and her braking has improved a lot.
The other solution that works (cheaper and heavier) is a set of Hayes hydros with the replacement and fully adjustable Razor Rock levers. Razor Rock doesn't make the levers anymore, but someone has bought the rights to produce them and the word is you can get them from Scott @ go-ride.com. The wife has this setup on her DH bike and loves them.
In this pic, the Juicy brakes are attached to a small diameter WSD handlebar.