This Has Got to be One of World's Smallest Cameras Available for Sale The ChobiCam and the Y3000
"This has got to be ,one of the world's smallest commercially available cameras. Hard to say exactly how small but look at the picture for comparison. It's the JTT CHOBi Cam One HD 8 Megapixel Ultra-Mini Digital Camera. Front to back is supposed to be diameter of a Quarter coin.
Also look at the video below of a camera called the Y300 ( From an interesting website called Techmoan)
Per a gadget store that sells it "This tiny camera is actually an 8 mega pixel camera that shoots both stills and videos, as well as sound. It has a unique LOMO retro image quality and with its incredibly small size, it's the ultimate spy camera.."
"Unlike its predecessor, which can only take pictures at 1600 x 1200 and videos at 640 x 480, this upgraded version is 8 Mega pixel and snaps photos at 3264 x 2448 resolution and records 1280 x 720 videos at 30fps. The increase in size between the predecessor to the current HD model is only about 0.1 to 0.3 inches on each side". Can be seen at AC Gears in New York.