Western Digital has given their portable USB drives an overhaul, with the introduction of the "My Passport Essential" units. The new units are complementing the "My Book" series, and have designed the units to be aesthetically pleasing and easy to put into your pocket. They weigh less than 5 ounces and cram 320GB of space into a very tiny little unit, so they definitely do fit into the portable category.
The 2.5" units will start at around $200, and includes the standard suite of Western Digital software they include with their ready to go USB drives. If you'd rather deal with portable storage yourself and not have software do it for you, this is probably not a fit for you. But for people who want "media management" to come along with their units, it looks like a good way to go. You can read the full press release at WD's site.