To the OP:
Basically, a smaller planet just results in 1) lower gravity and 2) a much more noticeable curve to the horizon and land, as perceived by creatures living there. That's pretty much it. #1 can be solved by saying that the planet's core is proportionately larger and denser than Earth's (taking up a larger percentage of the planet's volume), and that means it's probably composed of molten adamantine or something. I forget if gold, platinum, or copper is heavier than iron, off the top of my head...... If so, then they might be better sources for the planet's molten core. #2 can probably be solved by saying that there composition of the atmosphere is a bit different, and obscures vision (or distorts the visible curvature of the land) moreso than Earth's over long distances, to the eyes of normal creatures.
Regarding one poster's mention of a differently-colored sky: he has a bit of a point there, all of this means pretty much nothing to the PCs, usually. Also: to note, the human eye doesn't see the spectrum of light in quite the proper 'purity' or whatever......since we developed on a world with blue skies and a yellow sun, we perceive colors as having a bit of a yellowed hue, compared to the true spectrum of light, IIRC. So what we perceive as being white is actually a bit yellow, and what we perceive as being red is actually a bit orange, or something like that. So in a setting where creatures are born under the natural developments of a world with orange skies, they would not perceive it as being anything odd or unusual. But if they were transported to an alternate Material Plane that resembled our own, they'd see everything being unusual in coloration; a wall that we painted white may look, I dunno, fuschia or gray or dark green or something, to an inhabitant from that orange-skied world (moreso if their own sun wasn't a yellow star). This is all postulation, mind you; I'm no scientist and cannot say with authority how exactly it would work, but this is my understanding.