I don't know I'd say it's the "best" phone, but the Pantech C3 is tiny and has a reputation for covering a lot of the core functions (including Bluetooth on the C3b) well for the size.
In practice, probably the best bet is a slider phone - it's small until you need to dial, which makes it a good fit for your pocket.
I see friends having to import their perfectly tiny phones from asia and europe while having the rest of us idiots look on in awe with our giant '****** banana phones in our ears. My friend had something he picked up in some shady aisan irvine walk-in. The phone's no bigger than a post-it note in his hand and has touchscreen controls and clear calls. My friend next to me is fumbling with his cheap, clunky razer, ogling the cameraphone feature.
I don't even have a phone because of the problem above. The question here is, what is the best small phone out there, nationality be damned? Post, post!