I'd suggest the Michelin City 26x1.4
Comment:
Tread on tyres that will be used mostly on the road is counterproductive. You get grip from the road digging in to the rubber of the tyre, not vice-versa. If the tyre has tread, there's less rubber for the road to dig into, so you get less grip. You can also get the knobbles squirming about, which may cause problems.
Cars have tread to clear the water out from under the tyre. On a bike with much narrower tyres you have to be doing silly speeds (80-100mph) for water to be a problem.
Sizes:
26 x 2.0 does indeed mean 26" in diameter and 2" wide. However, if the tyre were only 1" wide (and high), it would still be called 26 x 1.0, despite the diameter being only 24". This is because it fits on the same size rim.
You can use any tyre that's got the width marked as a decimal number rather than a fraction (26x1.5 rather than 26 x 1 ½). Tyres marked 26-and-a-fraction will fit a different size rim. The rim diameter will also be marked on the tyre - you have 559mm diameter rims, so you should also see "50-559" marked on the tyre, where 50mm = 2" is the tyre width.