It looks like a thumb drive at first glance, but AirStash is actually a pocket-sized media server that can wirelessly expand the memory of your iPhone or iPod touch.
Apparently, the files are stored on an SD card that you insert into the device - giving you the ability to expand capacity when needed. I assume AirStash will be compatible with more devices than the iPhone and iPod touch, but we won't know the exact details until it is officially unveiled at CES. Personally, I wouldn't be all that thrilled about having to keep track of another device because I went with an 8GB iPhone, but I am all for technologies that reduce the need for a set amount of internal storage. [AirStash via Engadget]