"We've seen a lot of DAPs claiming to be the "world's smallest MP3 player," but Zicplay's Microkey take the concept to a whole new level, featuring 1GB of storage in a package just 1.7 inches long and a half-inch wide -- slightly longer than an iPod shuffle but half as wide. The half-ounce player gets six hours of playback off its lithium-ion battery, and apparently just shows up as a USB 2.0 flash drive -- no media software required. No word on pricing or availability, but these were just shown off at IFA, so should be soon now."
Not sure what organization hands out the official "world's smallest" title (perhaps of division of the Guinness Book of World Records) but this certainly is a tiny and sleek looking player.