| The White Toymaker |
If someone wants to play a small human, your best bet is probably to have them play a halfling. Failing that, you would likely want to apply a -2 penalty to strength, +2 bonus to dexterity, all the modifiers that come with being small (+1 to Attack Rolls and AC, +4 to Hide, -4 to Grapple and a variety of other checks, and reduced damage dice with weapons) and possibly reduce their land speed by ten feet.
It's basically a halfling anyway, at that point, but you get the extra skill points and bonus feat (and undetermined favored class) rather than the halfling's rather nice, if less versatile, racial ability suite.
Or if you don't want to hassle with it, you can either ask him to play a human who's just barely over the threshold for a medium creature, or rule that (like a dwarf) he's build solidly enough to be treated as medium despite his stature.
| The White Toymaker |
I believe that the Complete Arcane covered this, and the long and the short of it is that you can make an unarmed strike to deliver a touch attack, dealing damage as appropriate for your unarmed strike and the spell. However, this is resolved as a standard melee attack, rather than a melee touch attack.