Cute engine, but not really a diesel. It looks like it has compression ignition like a diesel, but has a carb type device like a glow plug engine instead of fuel injection.
It is a compression ignition engine for model airplanes. In the model hobby they are called diesels. My guess is that machining tolerances have to be small to hold compression at such a small scale. As far as I know this is the smallest internal combustion engine ever produced. A friend of mine just bought it and says that only 13 have been made so far.
It's a pretty amazing little engine. I remember when a 0.049 engine was small and a 0.020 was borderline exotic. If my memory serves me right on model engine size ratings, that one would be a 0.001.
How hard is it to get started and to keep it running?
As to smallest, there's silicon chip Gas Turbines being built these days which are microscopic in comparison (if you count GTs as internal combustion).