Really tiny USB thumb drives from Verbatim, Crucial, others
I recently received the 8 GB Verbatim's Tuff and Tiny USB thumb drive. Actually, a better word for these tiny drives would be thumbnail drives, because they are about the size of one, and as thick as a piece of cardboard. For about $30, you can carry around a lot of data on your keychain or in your wallet. The hardest thing is keeping track of the little buggers, but they come with lanyards to make it easier. As you can see from the photo, the drive's electrical contacts are molded into the hard plastic case, and the company says they are water resistant. I will try them out and let you know, but in the meantime, if you are shopping for some external storage, you might want to consider this form factor. They certainly are a geek conversation starter.
The drives come with password-protection Windows software, and can connect to Mac or Linux PCs but you'll have to provide your own encryption software. I used PGPDisk and it worked just fine with my drive. File transfer speeds in informal tests seem to be equivalent to the larger USB v2.0 drives that I have used.
There are others who make similar drives, and in sizes starting at 1 GB:
Crucial's Gizmo Jr. and SuperTalent's Pico are two. The Pico is available in sizes up to 32 GB, which is pretty impressive. And Sony's Micro Vault Tiny uses its own software drivers, and may not be as waterproof as the other designs. But it comes in different colors, something you would expect from Sony.