The notion of an internet composed of objects with RFID tags sharing information—in effect, an internet of things rather than an internet of people—has become a popular meme. Below are the good bits from a longish article on all of this from Sun.
“The EPC network, using tiny RFID (Radio Frequency ID) tags, will enable computers to automatically recognize and identify everyday objects, and then track, trace, monitor, trigger events, and perform actions on those objects. The technology will effectively create an ”Internet of things.“ RFID will fundamentally impact the industries of manufacturing, retail, transportation, health care, life sciences, pharmaceuticals, and government, offering an unprecedented real-time view of assets and inventories throughout the global supply chain. And in the process, whole new vistas (and challenges) will open up to software developers. [...] we stand on the verge of an era that will see previously unimagined networked devices and objects [...]
Even trees are on the network. Fifty battery powered ”micromote“ sensors now dangle from UC Berkeley's Mather Redwood Grove, part of a pilot program to monitor the health of groves of 
redwoods. The sensors register light, moisture, and temperature, enabling scientists to continuously monitor the microclimates surrounding given trees. [...] In the future, everything of value will be on the network in one form of another...And once they're on the network, we can aggregate data from those diverse devices, and then deliver that data to equally diverse devices -- in informative and compelling ways...here we are connecting trees, race cars, and astronauts to the network. It's going to become a much more seamless spectrum. [...] With the official release of the Electronic Product Code Network, we are about to see the ”Internet of things“ paradigm enter the big time -- the world of mainstream commerce. [...]
RFID is a generic technology that entails using tiny wireless transmitters to tag individual objects, uniquely identifying them. Such RFID tags allow companies to automatically track objects, trigger events, and perform actions upon the objects. RFID chips have now been made as small as 0.3 millimeters (about the size of a pencil tip). There are a variety of different types -- active (battery-driven), semi-passive (also battery-driven), and passive (driven by the inductive energy of a tag reader). [...] In order to provide a truly useful ”Internet of things,“ it's necessary to ensure open standards and global interoperability. [...]
The vision of a world where computers could identify any object, anywhere, instantly [...]
But to realize the Auto-ID Center's vision, it's first necessary to define, build, test, and deploy a global, open infrastructure on top of the Internet. [...] At the core of the Auto-ID Center's just-released infrastructure for RFID technology is the EPC code, the numeric data transmitted by a tag. The EPC code is, in effect, intended to be the next generation of the Universal Product Code (UPC), or bar code, that is found on virtually every consumer item today. But unlike the UPC, the EPC is designed to operate not only without ”line of sight“ (that is, wirelessly), but to uniquely identify each individual object. [...] Tag prices are currently $.20 apiece, but are expected to drop to $.05 apiece. [...] Wal-Mart recently notified its top 100 suppliers that they must install RFID tags (for inventory tracking) on all cases and pallets of their products by January 1, 2005. And the remaining 12,000 suppliers are expected to follow suit by 2006. When Wal-Mart speaks, the retail industry listens. Clearly, RFID is a technology whose time has come. [...]
To meet the needs and challenges of the burgeoning ”Internet of things,“ developers will need to change their notions about what a networked device is -- and how it can be used to provide compelling and profitable services. In short, it's time to think outside of the PC/handheld box. [...] As an application developer, you have to sit back and say, if everything is connected to the network, how will that change the way I process information?”
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