"Small ball" sounds like a trick, a gimmick, an unsustainable way to cloak a team's deficiencies. This does not have to be the case, though, since the term merely means tweaking a traditional frontcourt of two large, non-three-point-shooting bigs. There are many iterations to "going small," some of which aren't even small on the balance. Let's take a look at the various styles.
Specifically, I'm talking about the Dream years. Back when Hakeem Olajuwon was twisting opposing centers into balls of twine, Houston surrounded him with three-point shooters. With Robert Horry playing the 4-spot, the Rockets stretched opponents thin, giving Hakeem the room he needed. This was quite innovative for the illegal-defense era.
This was the evolution of Rocket Ball. Dwight Howard rebounded and defended so well that he compensated for the poor rebounding and defense of surrounding shooters. Dwight was also so fearsome in the paint that teams would double-team, allowing for open looks from the perimeter.
The difference between Rocket Ball and Magic Ball was that Stan Van Gundy would play tall players in guard and small-forward positions. Orlando memorably upset Cleveland in the 2009 playoffs with Hedo Turkoglu and Rashard Lewis hoisting shots above the Lilliputians.
Pioneered by Mike D'Antoni, this attack was predicated on speed and in-rhythm three pointers. The idea is to play athletic shooters and run at a pace that breaks defenses. Pick-and-roll with a spread floor is an added bonus to such a scheme. Note: This style is much easier to employ when Steve Nash is your point guard.
Point Forward Ball
LeBron James is the key to Miami's "small" attack, as ESPN's Tom Haberstroh detailed. Playing James at the 4 isn't really small because he's proper size for a PF. The bonus offensively is that LeBron can slash slow bigs to scraps while operating as a point guard.
The defensive advantage is that other larger players can occupy the 1-spot. This particular style is really synonymous with Lamar Odom, but he's shuffled off to the fringe of NBA oblivion.
Named for the Dutch soccer innovation "Total Futbol," this is more specifically my view of Miami's approach. LeBron James and Shane Battier can guard positions 1 through 4, Dwyane Wade can guard positions 1 through 3, and Chris Bosh can guard 4 and 5. Bosh's shooting allows him to spread the floor on offense, giving Miami five three-point threats in certain lineups. This may be the closest we've come to wholly positionless basketball.
The Golden State Warriors famously upset the No. 1-seeded Dallas Mavericks in Round 1 of the 2007 playoffs using this whimsical approach. Nellie had Andris Biedrins drink in the rebounds that surrounding shooters were less equipped to grab, and those shooters tore up and down the court, flinging threes from all angles. Baron Davis powered the attack and allowed for positional flexibility by guarding 1's and 2's. Al Harrington and Stephen Jackson played power forward or small forward, depending on what the situation required.
Nellie Depression Ball
Named for Don Nelson, this is the mad-science approach of going comically small, probably to your team's detriment. In the bleak, sad, "calling-a-radio-show-from-a-bar" years of post-We Believe misery, Nelson was liable to play five guards at once. This could work for stretches, especially if the guards got hot from beyond the arc. Over a sustained period, though, the style gave up easy baskets in the lane and even easier offensive boards. This all-guard offense is a dark shade of whimsy until proved otherwise.