I was just thinking the same thing.  The essential element of a digitial camera is the sensor, a tiny wafer normally placed within a comparatively large camera.  Why couldn't the same sensor be placed in a small camera---without the features and robustness of a large camera---that we could carry all the time?   Think of the new opportunities to take pictures.

As I have mentioned elsewhere, I have heard second hand that both Contax and Leica have ruled out using their rangefinder lens systems with a 35mm format sensor partly for technical reasons, with Leica in particular explaining that because those RF bodies are slender by having the lenses mounted far closer to the film than with SLR's, light from the lens would hit the corners of the sensor at a far more oblique angle, and this would then cause the problems talked about by Olympus that have turned out not to be significant with 35mm format DLSR's.

But it's all rumors!

I do most of my serious (amateur) shooting away from work with a D30 + 4 lenses.  However, during work, I carry along a small compact dig. camera.  It hardly takes any room (fits in my coat no problemo) & because it's always with me, I've been able to get some good picks.
Now, wouldn't that be great if the manufacturers could make a professional, but small version of the D1X or 1Ds or the like that would have the same image quality but 3 times as small.
You'd have a pro camera & lenses that you could easily cary around all the time.
I know manufacturing a complete lens lineup is a big deal, but just think of the possibilities.  
Jules

Small is definitely good.

I'd like a Leica rangefinder equivalent with the 1Ds sensor.  Heck, I'd even go with a fixed lens, say a 35mm.

Peter

When I take my Sony F707 on vacation, I am constantly suprised at the quality of the shots. I am temped to get Sony's tiny tiny U-whatever (I can't remember the name) -- a palm-sized camera with 3MP, just to always have with me.