I agree with Anna. I personally don't usually go smaller than 2.5" square (mini charm). Smaller than that is usable, but a hassle to try to keep track of/store/sort through so unless I had immediate plans for something smaller, I wouldn't want it.
In addition to string/crumb quilts, applique often uses lots of tiny pieces. I'm working on the Calico Garden pattern right now & the blocks themselves are 3" square with tiny appliques inside each square. I'm hoping I can find a pack of 1950's mini charms to add to the diversity of fabrics in my quilt, but I suppose if I were able to get scraps from someone with LQS quality 50's repro fabrics, I'd take them as small as 1" square.