I've just launched a new project on Kickstarter called the TinyDuino and TinyLily. This is a family of boards that shrink the size of the Arduino to a new low, but without giving up the signals, processor power / memory, and expansion capabilities (via shields) that make the Arduino so powerful.
The TinyDuino is just 20mmx20mm (Smaller than a US Quarter)!, but still has stackable shield support and all the Arduino shield signals available! And it uses the same Atmel microcontroller as used on the Arduino Uno.
The TinyLily Mini is 14mm in diameter (Smaller than a US dime)! This board has large sewtabs for easy soldering to, and also uses the same ATmega328p as used on an Uno.
I'm interested in any feedback you have on this project, and look forward to hearing everyone's thoughts. http://www.kickstarter.com/projects/kenburns/tinyduino-the-tiny-arduino-compatible-platform-w-s
Ken @ TinyCircuits (http://Tiny-Circuits.com