Anyuser, a gobal VOIP provider announced in Japan what they call the world's smallest VOIP phone.

The Anyuser ImPhone is a USB memory stick with integrated voice over IP circuits and software. When plugged into a USB port, the ImPhone software is automatically activated and a software phone appears on the screen ready to make a call.
The Anyuser ImPhone stick can also be used as file storage. The stick comes in 64MB, 128MB and 256MB configurations.
The Anyuser ImPhone sells for 3,970 yen (~36USD), about 4.50USD worth of prepaid calls.
More details on the Japanese Anyuser site (Japanese). First seen on JCN Network.