The Sony DSC-T1
Sony Japan have just announced (Babelfish translation) the addition of what is currently the smallest 5-megapixel digital camera in the world (for now).
Key info - it's just 17.3mm thick, has a 2.5" LCD screen (which takes up most of the back of the camera), a 3x optical zoom Carl Zeiss lens and makes my DSC-F707 look like a hulking great behemoth, even though it's evidently pitched to quite a different market.