Micro, by Michael Crichton and Richard Preston

Well, this was sad. Obviously, this is the last book Crichton was working on when he died, and you can pretty clearly see where Preston took over- the philosophical kind of musings and speculation that raised up the level of Crichton's thrillers was no longer there after the first hundred or so pages, and after that, it was pure thrill-driven action adventure with an eye to being made into a movie, if you know what I mean.
The shrinking of people down to half and inch has been approached before, and so have the dangers of nanotechnology, in Crichton's own (and much better) Prey.