How small do USB drives have to get before they're officially too small? This EagleTec USB Nano Flash Drive is pushing the limit, but even at its Lilliputian dimensions, it can still stuff 8 GB in there. Good thing it has a little hook on the end so you can attach it to your keychain, or you would lose it the first day you had it.
It's cheap, too. A mere $33 takes home the 8GB model, and if that's too steep for you, the 4GB version is $22. While its 6Mb per second write speed is not exceptionally fast, it'll do in a pinch. Our idea for a future version: give it a tiny slot that accepts microSD cards.