AeroVironment is to build a prototype flapping-wing nano air vehicle (NAV) for DARPA, having successfully demonstrated controlled hovering flight with an interim test vehicle called Mercury. Here's AV's pretty cool video showing the test steps that led up to that milestone.
This is a vehicle that, under its own power and remote control, demonstrated it could use a pair of flapping wings for both propulsion and flight control, climbing, descending and flying forwards, backwards and sidewards in the hover.
The next step gets tougher, AV has to shrink the vehicle's size and weight, extend its endurance and demonstrate transition between vertical and forward flight and back again. The prototype NAV'is to'be small enough to sit in the operator's hand and will closely resemble its biological inspiration, the hummingbird.