It seems particularly ironic that Haier--a company known for such hernia-inducing products as refrigerators and washing machines--would claim to produce "the world's smallest GSM phone featuring an MP3 player." But as Shiny Shiny notes, the world's smallest anything is claimed all the time, regardless of product or manufacturer.
Regardless of its Guinness status (the records, Caroline, not the stout), Haier's "Elegance" measures 3.5 inches long and features a Bluetooth stereo and either dual-band (U.S.) or tri-band GSM (Europe) technology, though there's no word of any camera. More than the specs, though, Haier is focusing on this as a fashion item, calling it a "lipstick-case-sized luxury phone" with "a gun metal-mercury mirrored surface," whatever that means. We'll just stick with the photos.