Inconsolata is my choice too. It's legible at small sizes and has clear distinctions between all the easy-to-confuse characters like 0 vs O, l vs I vs 1, etc.
And unlike many programmer-friendly fixed width fonts, it's also almost as comfortable to read as a good variable-width screen font when reading/writing/editing large blocks of text such as comments, personal notes, READMEs, etc.
