New Jersey model train maker David Smith built this 1-35,200 scale train set. It's 1/8" x 1/4". It's part of a bigger delightfully recursive creation. From The Telegraph:
"I am creating a fictitious village called James River Branch and this model train is going to be placed inside the model shop I am building as part of the re-creation.
"It is going to be a model train village inside a model, so it is very postmodern"
Powered by a standard two-inch-long rotating motor head and carved out of mouldable plastic, the model train cost Mr Smith just over £6 to make.
"World's smallest working model train set unveiled"
UPDATE: More details over at the homepage for The White River and Northern Model Railroad (Thanks, Jewels Vern!) And also video of the train over at Neatorama!