If I understand what you want correctly, this is what you need. It seems to me that your problem was in converting the image into a color array. For clarity, I used a multidimensional array in the shape of the image so it was easier to test to make sure I had the right pixels in the right spots. There also seemed to be a problem in the comparison loop where you forgot to add the starting position of the (0, 0) pixel. So if you thought the image started at pixel 30, you have to add on 30 to the index for pixels1. Here's what I came up with:

public Form1()
        {
            InitializeComponent();
        }

        public int[,] isImageThere(Bitmap fullImage, Bitmap smallImage)
        {
            Color[,] fullPixels = ImageToArray(fullImage);
            Color[,] smallPixels = ImageToArray(smallImage);

            // Iterate through every row
            for (int fullRow = 0; fullRow < fullImage.Width; fullRow++)
            {
                // Iterate through every pixel in the row
                for (int fullColumn = 0; fullColumn < fullImage.Height; fullColumn++)
                {
                    // If the current pixel on the full image is the
                    // same as the top left pixel on the small image...
                    if (fullPixels[fullColumn, fullRow] == smallPixels[0, 0])
                    {
                        // So far, we haven't found a mismatched pixel
                        bool badPixel = false;

                        // Iterate through every row in the small image
                        for (int smallRow = 0; smallRow < smallImage.Width; smallRow++)
                        {
                            // Iterate through every pixel in the row
                            for (int smallColumn = 0; smallColumn < smallImage.Height; smallColumn++)
                            {
                                // If the pixel on the full image isn't the same as on the small image...
                                if (fullPixels[fullColumn + smallColumn, fullRow + smallRow] != smallPixels[smallColumn, smallRow])
                                {
                                    // There is a mismatched pixel so set bad pixel to true
                                    badPixel = true;

                                    // Break out of inner loop
                                    break;
                                }
                            }

                            // If we found a bad pixel, break out of outer loop
                            if (badPixel == true)
                            {
                                break;
                            }
                        }

                        // If we passed through all pixels in small image, return location
                        if (badPixel == false)
                        {
                            int[,] res = new int[,] { { fullColumn, fullRow } };

                            return res;
                        }
                    }
                }
            }

            // If we looped until here, not match was found
            return null;
        }

        private Color[,] ImageToArray(Bitmap image)
        {
            // Create an array of colors the size of the image
            Color[,] colors = new Color[image.Width,image.Height];

            // Iterate through every row
            for (int y = 0; y < image.Width; y++)
            {
                // Iterate through every pixel in the row
                for (int x = 0; x < image.Height; x++)
                {
                    // Set color in array to color in image
                    colors[x, y] = image.GetPixel(x, y);
                }
            }

            return colors;
        }

        private void button1_Click(object sender, EventArgs e)
        {
            int[,] message = isImageThere((Bitmap)pictureBox1.Image, (Bitmap)pictureBox2.Image);

            if (message != null)
            {
                MessageBox.Show("Found at: " + message[0,0] + "," + message[0,1]);
            }
            else
            {
                MessageBox.Show("Not found!");
            }
        }