THIS is smaller (Score 1)

InnoGear claim their player is the smallest in the world. I haven't found the exact dimensions on the website, but this appears to be smaller (and much cooler!)

Dimensions: 42.2mm x 41.6mm x 15.8mm This has been available in Japan for at least the last 6 months:

http://www.panasonic.co.jp/products/audio/sd/sd80/ sd80.html