Casio has announced the Exlim EX-S100, which they claim is the world's smallest digital camera with an optical zoom - roughly the width and height of a business card and 0.66 inches thick.
The Casio EX-S100 is a 3.2 megapixel camera and features a 2.8x optical zoom, 4x digital zoom, 2" 354x240 pixel LCD screen, 9.3mb built-in memory and an SD / MMC memory card slot.
Exact dimensions of the Casio EX-S100 are 3.49" x 2.26" x 0.66" and the weight is 3.98 ounces. (By comparison the Canon SD-110 is 3.2 megapixel, 2x optical zoom, 3.35" x 2.2" x 0.94" and 5.82oz).
testing comments fix