I thought I had posted about this a year or two ago, but if, so I can't find it now. Anyway, I think this article has more technical detail than whatever I read back then. This is really cool stuff: it means that there is some hope of having a small camera that can approach the quality of an SLR.
Our FluidFocus lens uses electrostatic forces to alter the shape of a drop of slightly salty water inside a glass cylinder 3 millimeters in diameter and 2.2 mm long. The lens exploits surface-tension characteristics of fluids.
The optical power of our lens, with its inner cylinder diameter of 3 mm, can vary over a range of 150 diopters. This is accomplished by changing the meniscus between hemispherical (its radius equal to half the diameter of the cylinder) and concave (its radius approximately equal to the diameter of the cylinder). If it were the same size as a human lens, its optical power range would be about 50 diopters -- 12 times as large as the optical power of the human eye, which has a range of about 4 diopters. [...]
We built a digital camera just 5.5 mm high and 4 mm across [...] By changing the voltage on the electrode of the liquid lens, we were able to focus on objects at distances anywhere from 2 centimeters up to infinity. [...]
Optical zooming requires at least two lenses -- one to change the magnification, the other to refocus the image. In principle, changing the magnification by moving the lens throws the image out of focus. Conventional cameras keep the image in focus through a system of rods that connect the separate lenses.
We are presently designing a zoom lens system that uses two liquid lenses in series. This lens will work by changing the shapes, and therefore the optical power, of the two lenses, rather than by changing their locations. Compared with conventional zoom lenses, liquid lenses will have two advantages: no moving parts and a very small size at, potentially, a very low cost.