Since nearly everyone else in the science blogging world has touched on this (see here, here, here, here, and here, to name a few), I might as well do so, also. Leo Gross and coworkers at IBM Zurich have used an atomic force microscope to do something incredibly impressive: They have been able to image the bonding orbitals in individual pentacene molecules with better than atomic resolution, using the very short-range forces that contribute to the "hard core repulsion" between atoms. Atoms tend to be attracted to each other on nanometer scales, even in the absence of strong chemical interactions, due to the van der Waals interaction, which comes from the fluctuating motion of their electron clouds. At very short distances, though, atoms effectively repel each other extremely strongly, both from the Coulomb interaction (electrons don't like each other overly much) and the effects of the Pauli Exclusion Principle. Gross and colleagues accomplished this feat by working in ultrahigh vacuum (around 10-15 of atmospheric pressure) and at 5 K, and by deliberately attaching a single CO molecule to their conducting atomic force microscope (AFM) tip. It's a heck of a technical achievement for AFM. Atomic resolution has been demonstrated before, but this kind of sensitivity is remarkable. (FWIW, I once heard one of the major coauthors, Gerhard Meyer, speak at a meeting about the same group's ultrahigh resolution STM work. He seemed very low key about their obviously impressive achievements - amazingly so. I hope he got excited about this!)
Also, a group at Berkeley has made a laser based on a CdS nanowire, and like the result mentioned last week, this gadget uses plasmons (this time in a Ag film) to act as an effective cavity. Clearly using the extreme confinement of some plasmon modes to do photonics is going to be a growth industry.