The video that you see below is a demonstration of the General Robotics, Automation, Sensing and Perception (GRASP) Laboratory at U Penn. Their work with nano-quadrotors is nothing short of amazing. The tiny rotor craft are able to fly in some pretty big formations and avoid simulated obstacles.
At this point there probably isn’t much application for swarming nano-quadrotors, but the big brains at DARPA will probably figure something out.
[Ubergizmo]