The smallest knife that I carry these days is a Kershaw Blur!
The Benchmade mini-grip is my idea of a micro knife.
Ok, seriously though, I did buy a Spyderco Ladybug not long ago as an experiment and finally decided it was too small for me, even to carry as a second knife. But I am interested in trying a Spyderco Dragonfly. That might be what I would consider a micro knife.
People think of knives in terms of the blade length, I think in terms of the handle size. A very small knife normally has a very small handle which makes it hard to hold onto and use for anything serious. Think of the interchangeable blade utility knives- they have a big handle but a blade that might stick out only 1/2" or 3/4". It is capable of cutting tough materials because of the handle size even though it has a very small blade.