Richard Miniter has an excellent article debunking the common myth of "suitcase nukes". He goes to great lengths to explain why they don't exist, never existed, and are not a real terrorism threat. To steal his conclusion:
For now, suitcase-sized nuclear bombs remain in the realm of James Bond movies. Given the limitations of physics and engineering, no nation seems to have invested the time and money to make them. Both U.S. and the USSR built nuclear mines (as well as artillery shells), which were small but hardly portable--and all were dismantled by treaty by 2000. Alexander Lebed's claims and those of defector Stanislev Lunev were not based on direct observation. The one U.S. official who saw a small nuclear device said it was the size of three footlockers--hardly a suitcase. The desire to obliterate cities is portable--inside the heads of believers--while, thankfully, the nuclear devices to bring that about are not.
The essay also provides a fascinating glimpse into Russian and American nuclear security.