Every weapon is a "sneak weapon", as long as you use it while sneaking.
Only one handed weapons give the sneak attack bonus.
If it's the same as OB then using Daggers in combat means you hit faster and more often than other weapons but do less damage per hit (obviously). The down side to using daggers in combat is that it's harder to keep your distance in combat, as you have to get close to attack, this means you get hit more often.