This has to be the smallest portable audio studio I’ve seen.
It’s the just announced Belkin iPod Podcast Studio. According to Podcasting News:
Belkin has introduced the Belkin Podcast Studio – a $100 accessory that basically turns your iPod into a mini podcasting studio – just add a mic.
Dual XLR and 1/4-inch channels give you a range of recording options. The Podcast Studio has a built-in mic and speaker are powered by their own battery, so you won’t kill your iPod battery instantaneously. Belkin expects to ship this in June.
You might also want to keep the Belkin TuneStudio in mind too.