If you're already here, I think you already understand why someone would go with a tiny camper...
Easy to tow
Better gas mileage (lighter)
Less to maintain
Usually less expensive than most RVs
So how small can these things get?
Those are teardrop trailers. They're pretty much a bedroom and a kitchen (galley) on wheels. They're great for camping and there's practically no set up time versus tent camping.
Now let's go up in size just a little bit and we have what Don Mills, a 35 year camping specialist calls a Micro camper. His video will describe it pretty well:
Small trailered RVs aren't the only kind of tiny campers!
I think this is the smallest motorhome I've ever seen...
And there's more... You would have never guessed, bicycle campers.
If you are willing to do some work you can save a lot of money by refurbishing an older trailer. Teresa did this and posted her before and after pictures on eHow, check it out. She ended up with a real nice little camper!