Here's one for the "do we really need this?" department:
Sharp have announced a 1/1.7" 12MP digital camera sensor. A 1/1.7" sensor is approximately 5.7mm x 7.6mm. The current crop of digicams top out at 10MP, but with this new Sensor form Sharp can the 12MP digicams be far behind?. The pixel size of the new sensor is 1.88 microns, so if the sensor was full frame 35mm (36mm x 24mm) it would be 244MP! 1.88 microns is about 1/2 the diffraction limited spot size of a perfect f2.8 lens and 1/4 of the DLSS of a perfect f5.6 lens, so making the pixels any smaller wouldn't really serve any useful purpose.
In a press release (http://www.sharp.co.jp/corporate/news/061108-a.html - in japanese) Sharp announced that the first samples of this device should be available at the end of this month (november 2006) and full production shipment should start in January 2007. The price of the sensor is around $70 and they expect to make 100,000 per month.
A second version of the device can group 4 pixels together to form a 3MP sensor with higher sensitivity to light. This would allow a camera to operate in a lower resolution mode with better noise performance.
I suppose it's inevitable that more and more pixels will be crammed onto the same tiny sensors that digicams use, but the higher pixel density results in higher noise and little improvement in image quality. Still, the marketing departments know what they are doing and so while the public buys cameras based on pixel count there's an incentive to keep increasing it.