Probably destined for linkrot, but Gregory Huang has penned a nice in depth article detailing startup Peppercoin's drive to make micropayments work. Boiling it down to the essentials, Peppercoin basically bills the buyers accurately, but randomly pays the sellers big. Conceivably, sellers could get screwed, but the stochastic properties of the system smooth out the payments. Meanwhile, paying big aggregates many small purchases and makes the micropayments cost effective.
Between Peppercoin's genius tech wizards (Ron Rivest & Silvio Micali) and smart management, it would appear to be a no-brainer.
Here's my question though. How do you get enough buyers to sign up? PayPal worked as an adjunct to eBay, but now that PayPal is part of eBay, Peppercoin can't hitch a ride on that wagon.