There is nothing wrong with using a smaller valve with a larger pipe.
The primary purpose for larger pipe is to reduce pressure losses over a long run. The larger pipe also allows for a lower velocity for a given gpm (higher velocity can lead to water hammer).
Example: With Sch40 PVC at 30gpm: 1" pipe has about 18psi loss over a 100' run (and the water flows at 11ft/sec TOO HIGH!!!!). 1-1/4" pipe has about 5psi loss over a 100' run (and the water flows at 6-1/2ft/sec, still high, but not too high). 1-1/2" pipe has about 2psi loss over a 100' run (and the water flows at 5ft/sec, a safe speed).
If there is going to be 30gpm flowing through your sprinkler system, I'd say that a 1-1/4" pipe is too small and you should use 1-1/2" (with the 1" valve still being fine). Based on the pipe charts I'm looking at for PVC, I wouldn't use 1-1/4" UNLESS the expected flow is 25gpm or less.
As for sprinkler heads being in a strait line, again, pressure losses are what is important. You want all the heads to be operating at about the same pressure (you don't want 30psi pushing on the 1st head with only 15psi on the last). From what I've heard, a pressure difference of about 5psi should be ok, and with 1-1/4" pipe, that means at a flow rate of 30gpm, the first to last head in a strait line can be upto around 100' apart.