I'm pretty sure it is Vatican City - it has its own laws, government, police force, head of state (the Pope), etc.
I'm very much looking forward to watching Angels & Demons when it comes out at the cinema, too - I wonder how much of the 'behind the scenes' information about the Vatican is correct?
Territory: 0,439 km2 (about 44 ha; 108,5 acres)
Coordinates: lat. 42° N; long. 12° E
Saint Peter's Square is at 19 meters above sea level and the highest part of the Vatican Gardens is at 77 meters.
The territory covers a maximum length of 1,045 meters and width of 850 meters.