In May 2010, only a few weeks after NXP announced the LPC1102, the smallest 32-bit MCU, Atmel has production availability for the world's smallest flash microcontroller package overall. The Atmel ATtiny4, ATtiny5, ATtiny9 and ATtiny10 AVR microcontrollers come in an ultra-small 8-pad UDFN package, with a dimension of only 2mm x 2mm x 0.6mm, and weighing less than 8 mg. These products target applications in the consumer electronics, lighting, and industrial control markets. The new devices are well suited for lightweight and small form factor consumer applications, such as cell phones, toys, tooth brushes and other personal care and portable electronic products.

Until recently, Silabs was the only company to offer a 2x2mm device, the C8051T606. Microchip offers the PIC10F200 series at 2x3x0.9mm. The new ATtiny4, ATtiny5, ATtiny9 and ATtiny10 are in deed only 45% the overall size (66% footprints) of the PIC10F200 and offer the same footprint as the OTP devices from Silabs

Having a look at other ultra small devices on the market, Silicon Labs and NXP come to mind. NXP just announced a 2x2.5 16-pin 32-bit device with a Cortex-M0 CPU and 32 KBytes of Flash. Using the high precision internal oscillator the LPC1102 can run at 48 MHz or even a little faster with an external clock. Another worthy competitor is the C8051F300 series from Silabs. This high performance 8-bit device is available in a 11-pin 3x3x0.9mm package and offers 25MHz / 25MIPS performance. Available form Silabs too, the OTP family around the C8051T606. It offers 25 MIPS as well and a 500 ksps 10-bit ADC. 

It's fair to say that we could not find a smaller package than this one for the ATtiny and for some applications the difference between 4mm2 and 6mm2 footprint just might be the most important difference.

All in all, it is amazing what silicon vendors can fit in these ultra small packages these days. 

Designs that are feasible with such small chips may include the inside of electrical leads and miniature connectors, printer heads, and other applications such as inside clothing fabrics, plastic cover sheets or shells.

The AVR comes with low power consumption at 650 nA, with a RTC running, and less than 100 nA in power down and it also contains a rich feature set and can execute code up to 12 MIPS at 12 MHz.

Silabs has had the highest performance miniature MCU for quite a while now. With the LPC1102 approaching, that will change. AVR has a clear performance advantage over the PIC10F but is outperformed the other 2 candidates.

Some question are not easy to answer:
What performance is needed?
Which price point makes most sense for these ultra small packages?
How many I/O pins make most sense?
Is it more beneficial to have less pins and a cheaper PCB?