In a project reminiscent of the Chinese microchip controlled pigeon, DARPA has a program called Hybrid Insect Micro Electro-Mechanical Systems (HI-MEMS). The HI-MEMS project is designed to implant a MEMS device inside a moth pupae. The MEMS device would be used to control the locomotion of the insect once it reaches adulthood. This information comes to us from the UK's Register. BoingBoing also posted a similar article.
The technology will probably not be long in coming. According to the University of Washington website, they have already implanted MEMS in moths. They used a species of moth called Tritonia diomedea, that grows up to 20cm in length. The experiments listed on the website were undertaken prior to 2004. The purpose of the project was to:
..intracellular recording in live, freely behaving animals. Intracellular recording allows high-fidelity measurements not only of action potentials but also subthreshold, synaptic interactions between neurons. The goal of this research is to build a self-contained implantable system that can record neuronal signals for several days. Afterwards, the animal is re-captured and the stored data is retrieved.
Basically, the research undertaken in 2004 was to record synaptic activity. Three years later, DARPA wants to take that information on neural activity and reverse it, by sending signals to the brain of the moth.