While at Rhinebeck my friend had the greatest little clip lights for knitting in the dark. Here is an image from the mighty bright clip light website (I'm a rhyming fool today)
Simple, one button, one clip light that is plenty bright and it's only 1.25"x1"x.5". I found mine at The Woolpack in Littleton, MA, but a quick google search shows that radioshack stocks them for a couple bucks cheaper.
These are perfect for knitting in the dark, but I found another great use for them - running. Both Jim and I have been clipping a couple onto our clothes when we go out for a run in the evening. I don't think they are quite big enough to light a running trail or anything, but they are perfect for running in the neighborhood where we just need catch the attention of passing cars.