Check out the peg and small travel sets here.
Small high quality chess set?
Someone really needs to revive Drueke and bring back the no. 32 set, as shown here: http://www.manfromplaid.net/chess/set030.htm
Meanwhile, ChessMate has some nice small sets, although they are a bit pricey. See here: http://www.chessmate.com/chessmate1.html
Here is one with nice wooden pieces: http://www.chessmate.com/chessmate1.html#travelmate

That Drueke #32 set is brilliant. That really would be the ideal first set for a lot of kids. I know my boy (9 yrs. old) actually prefers an old Lowe magnetic set we have to my standard tournament set due to the smaller pieces.

I got one of these for bedside chess book reading and analysis (though not from this supplier):
http://www.ebay.com/itm/Chess-Set-Wooden-Magnetic-Box-7-32-Magnetic-Chess-Pcs-Ideal-Travelling-Set-/221369469640
It's like a perfect minature of a wooden tournament board, and the pieces have magnets to keep from falling over.
I saw that chess set in a Souvenir's store in the middle east.
I'm glad I didn't buy it, now I see it was not really made "locally".

Wholesale Chess has some pieces (Classic, French, Zagreb, & Chamfered) with a 2 1/2 inch King that look pretty decent. Not sure what board would go well with those.
http://www.wholesalechess.com/shop/chess_pieces/wood_chess_pieces

Ended up going with a 10x10 wodden board with drawers and magnetic pieces from HOS. I think HOS is a marketing ploy, but they had it in stock and a lot of other sites were out of stock; secondly the other sites charge 18 bucks for ground, whereas for the same price it's 2 day on HOS. I'll tell you how it works out. Thanks again!
I was hoping someone could direct me to a small but beautiful chess set. I recently bought a nice "smaller" chess set (3 inch king) but it's still way too big for my purposes. My goal is to use the small set for analysis and for following along with books for endgames, openings etc. I want my MacBook on the left and the set on the right on a small desk. Any ideas? (I've looked at the Chess Store, HOS, The Chess Piece and Chess Bazaar and there isn't anything smaller that looks good).