Huh.  I wonder why?

Yeah, dunno.  EEs do it counter-clockwise

A dog makes a good sensor. So can a cat on the inside. Works here at least

Pighixxx's diagram for the T84/44 are not correct for the Attiny-core.  I don't know which core he is referencing, but his number is backwards.

He may have been referencing the HLT core, it numbers the pins the other way 'round as compared to Arduino-Tiny. But they both do the t85 the same. Wouldn't say that pighixxx is wrong, but he should note which core his diagram applies to. Better, diagram the chip for both cores.

To try it with the DS18B20, I'd start with a couple in the TO-92 packages just because they're easy to breadboard. These would be fine to develop the code with and do preliminary testing. If that looked good, I'd get some in the smallest package and have a very small and thin PCB made for the sensor. Here is one of several good PCB services out there. Both packages should work the same, the smaller will respond to temperature changes faster and will probably work better under a bandage if that's the intent.

Get the OneWire library here to interface to the sensor. The code should be a piece of cake, just modify one of the examples that come with the library.

Showing my lack of electronics wisdom here, but would a 2N3904 substitute for the 2N4401?

More than likely. 2N3904 has a maximum collector current rating of 150-200mA IIRC, which should be plenty. 2N4401 is good for maybe twice that. Both have similar current gain specs.

Actually it would probably work, in a non-contact mode. From your original post I got the impression you wanted a contact sensor. The TMP006 has some guidelines as to the emissivity of the measured object, I found that human skin is about 0.98 which should work well according to the User Guide on the page you linked, section 3.1, Target Object Emissivity Guidelines.

I'm no expert with temperature sensors, I've tried one or two, and the common DS18B20 works well for most of my applications, not as sure about yours. I've used the TO-92 package, but I'd think that smaller is better for your purposes, so I might try the µSOP package.  The stated accuracy of the DS18B20 is ±0.5°C, which may give it a slight edge over the TMP006. (Its resolution is 0.0625°C, which would fit your requirement for detecting 0.5° variations, be that °C or °F.)

Have you given thought as to how to evaluate the performance and accuracy of whatever sensor(s) you might try? Is there some standard to judge it against?

Couple things. One, that is a non-contact sensor, is that what you had in mind? Two, it's an extremely tiny package that will probably require a small custom PC board just to breadboard it and experiment with it, plus a hot-air station to assemble same.

NIce find, Terry! Sometimes it seems that there's not a lot new under the sun.

[Pro Git]

Thanks Jack - at this stage I have no interest in collaboration or sharing. And in another context I have looked at Git but I could never find any documentation that enabled me to understand it.

There is no requirement to share or to use the GitHub site, nothing needs to ever leave your PC.  Well you would want to use the site to download the software.  I learned mostly from Pro Git, which is available online for free in several formats, or in hardcopy form:
http://git-scm.com/doc
http://git-scm.com/book

Do you have that integrated with the IDE, or are you manually checking data in/out every time?

I'm not aware of a way to integrate it.  Checking out is not necessarily needed every time, although switching branches, making a commit, pushing repos, etc. requires use of the Git GUI tools or command-line interface.

Thanks for the reminder, you're a real hoopy frood!

I use Git. GitHub is good for online sharing and collaboration.

Does it still take forever for Atmel Studio to start up?  (WinVista on Sony Vaio laptop)
I was using it for a while to bootload '1284P chips, but soon got tired of the minutes long start up time and found out how to the change the MKii driver so the IDE could use it.

Just vanilla Atmel Studio on Win8 Pro, 3.4GHz Core i7, takes at least 30 seconds. Seems like forever.

E.g. I have a DHT11 sensor which I would like to extend. At the moment I have only a short 10cm long data cable and it works fine, but what if I wanted it longer. Or if I wanted to power a 5v relay over a distance of say 5m

5m is a fairly modest distance and I'm not sure how much I'd worry about it. Given Ambilobe's example, I'm sure the relay would operate reliably with 75 feet of wire. If I wanted to be extra safe I might go to 18 gauge. But remember that with 75 feet of wire for example, the relay would only be 37.5 feet away.

For a sensor, I'd be even less worried about voltage drop as the current would be probably an order of magnitude less. For long runs, I'd worry about EMI first.

I also posted sleep demo sketches for ATmega328P and ATtinyX5 on GitHub:
https://gist.github.com/JChristensen/5616922

To program an ATtiny85 with the Arduino IDE, you need to install a "core" that supports it. I've tried a couple, Arduino-Tiny, and one from the High-Low Tech group at MIT; I prefer the former. There are several others out there as well.

The "Million Ohms" project was programmed with Arduino-Tiny. It's an open-source project, check out the code here and the hardware design here (the schematic I posted above was modified from it, there's a lot in common). It uses the power-down sleep mode.