Toshiba announces the postcard sized TDP-FF1A LED Projector TDP-FF1A in Japan.

The TDP-FF1A will go on sale January 2006. This is also when the Samsung Pocket Imager SP-300M is going to be available.
The Toshiba TDP-FF1A weighs 565g, which makes it around 115g lighter than the Samsung's tiny projector. The measurements are 140x57x102mm. Contrast ratio is 1500:1 and the supported resolution is 800x600. The price will be around $800. The Samsung Pocket Imager is supposed to sell for around $1,000.
NewLaunches has several photos of the Toshiba TDP-FF1A in action.
More details in this Toshiba press-release (Japanese).

Epson and Mitsubishi also have developed postcard sized projectors.
So I guess 2006 consumers will be able to choose from a couple different tiny projectors on the market.