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I just came across a new compact digital camera on cnet. It's called "Minimo," and it is definitely mini. It's 38 mm x 60 mm x 20 mm - about the size of a matchbox. But it takes pretty good snaps.
The Minimo only takes 2 MP pics - and it's set at an ISO equivalent of 80. So forget giant enlargements or low-light shots. But it does have a decent macro setting - as well as landscape. And it does produce bright, saturated pictures.
Even better, a series of "Wonder Lens" add-ons (optional) allow you to shoot some fun special effects, like starlight and fisheye.
The camera comes with 4 MB of built-in memory, but it has an SD card slot, so you can expand memory to 2 GB. (That's a lot of 2 MP pictures.)
There are only two drawbacks I've seen so far. First, it's Windows-only, so most Mac users may be out of luck. (Unless, of course, you have Windows installed.) More importantly, you may have trouble finding a reliable dealer. I've only been able to find it offered on a few Asian blogs and personal websites.