This all got very confusing but I walked away thinking there must be some reason everyone recommends FBX. However, when I took the OBJ file and converted it to FBX via Blender it worker flawlessly, unlike the OBJ to FBX via FBX converter. Even the ones that were other file types then converted to FBX. I also noticed that FBX had scaling issues when imported into Unity. I then converted all these files into FBX using auto desk FBX converter 2013 (because someone told me that Unity just converts non-FBX files into FBX anyway.) Now the results showed that the OBJ file that was converted to FBX was still smaller than the other formats converted to FBX (how ever the standard OBJ file was still the smallest.) Note that this was a small, texture-less, simple model exported from Sketch Up. Well I did some testing on a simple model from Google Sketch Up which revealed that out of all the file type I tested (OBJ, DAE, and FBX) that FBX had the biggest file size followed by DAE and then OBJ with the smallest file size.

So I've seen one or two threads on which file type people should use and most people have said to use FBX.