The term refers to a technology
concept in which a number of small devices form a
network to operate as a single
system. It was first popularized (thanks,
IWhoSawTheFace) by
Stanford Professor
Kris Pister.
The minimum requirement for such a network would be communications interconnectivity. In other words, each device in the group becomes a communications node, relaying and routing messages from one device in the network to another.The communications distance is only limited by the spread of the devices.
One advantage of a smart dust system is that each device can be relatively simple and low-powered. Since each device is a node, it only needs enough power to communicate with the next device in the chain. In addition to reducing costs, this method of operation significantly increases redundancy
At the high end, each device would also become a processor in a massively parallel computer. Such a system could form from devices in size and numbers ranging from something as massive and complex as a company of robotic tanks that "think" and act as one to a swarm of microscopic robots that behaves as a single entity (as described in the book Prey or my book Cyberchild) .
The current level of development is closer to the minimal case than the ultimate, with the sensor industry doing most of the development. One can buy today small self-contained sensor modules that can link into a web to report on conditions over a large area. One such company, called Crossbow (they also make fiber-optic gyroscopes for things like tank turret stabilization and such) makes smart-dust sensor networks, and can be found at http://www.xbow.net/Products/productsdetails.aspx?sid=3.