Well i haven't checked the Guinness Records for this one, but this is smallest one i have ever come across. Its called the Xun Chi 138 and is made in China. It weighs 55 grams and is 2.64 inches long. To attain this miniature size the keypad has been ditched and the manufacturer has introduced 260K touchscree LCD. This phone is equiped with 1.3MP digicam (that apparently only takes VGA shots), GPRS and mp3 player, but no Bluetooth nor any expansion slot.
Enjoy the images below..
Friends, By the way if you come across something even smaller do post in the details.