As early as 1978 Bhandari and Rowe [Bhandari, 1978] suggested improving thermoelectrics by reducing the grain size. Back then ‘fine grain’ meant maybe micron sized or slightly smaller. But today people are learning to make nano-scale grain structures.
Starting thursday March 20, 2008 reports abound that GMZ Energy, Inc. (no website yet, AFAIK), a startup with an undisclosed amount of seed funding from Kleiner Perkins Caufield & Byers, is gearing up to make up to 7 tons/year of nano-scale Bi2Te3-type thermoelectric material with a reported 40% increase in ZT.
The process, said to be based on technology developed at MIT and Boston College, involves grinding a conventional Bi2Te3-type material to 20 nanometer particle size and pressing them back together again. Details have just been published in Science Express, http://www.sciencemag.org/cgi/content/abstract/1156446 [Poudel, 2008]. According to one source they "predict that their technique will be integrated into commercial manufacturing in several months".
A Google search on "GMZ Energy thermoelectric" will turn up many links, including:
Bhandari, C.M. and D.M. Rowe, Fine Grained Silicon Germanium Alloys as Superior Thermoelectric Materials, in Proceedings of the Second International Conference on Thermoelectrics, K.R. Rao, Editor. 1978, IEEE. p. 32-35.
Poudel, B., et al., High-Thermoelectric Performance of Nanostructured Bismuth Antimony Telluride Bulk Alloys. Science, 2008: p. 1156446.