(FORTUNE Magazine) – The last thing a company wants in its factories, trucks, or corporate offices is a layer of dust. But "smart" dust? That's a different story.

Hatched in Pentagon-funded research by the University of California at Berkeley in the late 1990s, "smart dust" refers to networks of cheap (under $100), low-power (1/1000th of what cellphones use), itsy-bitsy computerized sensors (some no bigger than an aspirin, but most about the size of a pager) that can monitor temperature, light, or vibration--or even sniff out radiation or toxic chemicals.

Most of today's versions are powered by AA batteries and controlled by an operating system aptly called TinyOS. These so-called motes survey the world around them and chat with each other wirelessly, grapevining down the line until the data get to a PC. (The "smart dust" moniker comes from the ultimate goal of making each mote about one cubic millimeter small.) When motes fail, others pick up the slack, and new ones dropped into the system quickly meld into the network. A dispersion of motes ten to 100 feet apart could monitor a hotel floor or a 500-acre vineyard.

After several years of tinkering, smart dust is primed over the next 24 months to blow out of the lab and into a host of commercial, military, medical, security, and ecological applications. An expected 150 million motes should ship by 2006 and will find their way everywhere from art museums to aircraft carriers. Along with the Pentagon, the Department of Homeland Security is also devoting a huge chunk of its R&D budget to sensor technology. Corporate America is still figuring out how it will cash in. But everyone, from tech companies like Intel and Motorola to consultants like Accenture to users like Cargill and Honeywell, is aiming to get in the game. "This is a year for learning," says analyst Navi Radjou of Forrester Research. "Next year the checkbooks come out."

Soon, these mini-me PCs will be found all over: Vibration sensors on a factory floor will tell when a machine is about to go on the fritz, saving millions in downtime. Air-pressure sensors on truck tires will prevent accidents and save on fuel. Sensors dropped in a forest fire's path will predict which areas will flame up next, while others will sniff for dirty bombs. Motes will be able to determine when a building is safe to reenter after an earthquake or monitor the vital signs (and locations) of elderly people.

Smart dust is far from perfect--issues of reliability, standards, and power consumption need ironing out. While motes can last for a few years on AA batteries--they spend a lot of time "asleep" to conserve juice--researchers want to make them smaller by ditching batteries and instead having them scavenge power from light or vibration. Privacy advocates also fear Big Brother implications if, say, microphone or camera motes are embedded in a system.

But those concerns won't slow this storm. A Dust Age is upon us. --Matthew Boyle