Measuring just one-inch squared, this tiny digital camera from Hammacher Schlemmer is touted as the world's smallest. It "can take JPEG images with a resolution of 1600 x 1200 and comes complete with autofocus." Available October 7th, priced at $99.95.
The camera also connects to a computer via a USB cable, just like regular pieces of photography equipment. Images are taken as JPEGs and videos as AVIs, both saved onto an included 2 GB microSD card (supports up to 32 GB cards).
Source: Tech E Blog.