It was an island in Indonesia:

Scientists have discovered a new and tiny species of human that lived in Indonesia at the same time our own ancestors were colonising the world.

The new species - dubbed "the Hobbit" due to its small size - lived on Flores island until at least 12,000 years ago.

An utterly fascinating description of a hominid that lived far, far beyond what was previously thought of our ancient cousins. So far beyond, it would appear they became part of another culture's memory:

Current speculation is that they're descendents of H. erectus, the first hominid to leave Africa about a million or so years before we did. Even more intriguing is the fact that Flores' inhabitants have incredibly detailed legends about the existence of little people on the island they call Ebu Gogo.

The islanders describe Ebu Gogo as being about one metre tall, hairy and prone to "murmuring" to each other in some form of language. They were also able to repeat what islanders said to them in a parrot-like fashion.

So not only do we seem to have non-fossilized hominid remains of a different species (allowing DNA testing), but potentially a detailed description of their culture. This is utterly unexpected and completely amazing. Weirder still, there is a small but definitely non-zero chance that these guys are still out there, wandering around in the jungles of Indonesia. If true, it would be an unprecedented discovery of monumental importance. Just spectacular.

Watch this space for further developments.

Update: New Scientist has this story on the find, with different pictures and other details.