UPDATE - LINKS FOR UNDERSTANDING:
The Super-LIDAR project indicates that they will put the devices into UAVs like predators. I was using satellite example because it happens to have some of the best surveillance that is available now. The LIDAR works better when it can fly around the thing it is watching to build up complete perspectives and model of the target where things like tree cover can be removed. It would use information that is blocked from one angle to "see past" it from another angle.
The difference in scale from 1000 times better resolution can be very well understood by some online tools:
Looking at the scale of things
This site has a tool that shows the different size scale of small objects
You can use them to see what zooming in from 1cm to 1 micron would look like. At 2 cm you are counting leaves. At 2 microns, you are counting leaf cells.
An online tutorial talks about how big cells are.
2 micron resolution means that you can see the individual skin cells and almost each e-coli that they have. You can analyze the 200 micron dust mites on the persons face.
With $9.5 million in DARPA funding, S.J. Ben Yoo, an electrical and computer engineering professor at the University of California, Davis, plans to develop a technology that will push optical data transmission speeds up 10000 times. Working in cooperation with researchers at MIT and several commercial partners, Yoo's team plans to design, build, and test thumbnail-sized chips that can potentially encode data at rates of up to 100 THz, some 10,000 times faster than currently available devices. Extending upon the O-CDMA concept, it is possible to pursue achieve ultra-high capacity all-optical arbitrary waveform generation covering optical bandwidth of ~100 THz. MIT announcement for this project. Progress reports from the MIT lab
"We will be prototyping a compact optical waveform generator capable of communicating at unprecedented bandwidth," says Yoo, who is director of the UC Davis Center for Information Technology Research in the Interest of Society.
Over the next three years, Yoo's research team will be prototyping a new microsystem capable of manipulating and encoding mid-infrared light carrier comb frequencies. Besides ultra-high capacity communications, the improved technology could lead to the development of high-resolution light-based radars (ladars), enhanced medical imaging systems, and even electrical signal synthesizers capable of extremely rich electronic tones.
Yoo says the military envisions several future applications, including ultra-high resolution surveillance capabilities.
"They have a very keen interest in remote sensing and imaging," he says. The military would most like to nullify the enemy's ability to hide inside complex mountain terrains and cityscapes. A very compact ultra-high-resolution imaging system installed on an unmanned air vehicle (UAV), such as a Predator, could eliminate the need to send troops on reconnaissance missions into hostile areas.
"The military says they can image a tennis or soccer ball on a field from a satellite, but they want to do much better than that," says Yoo. "If they use our technology, they can make the resolution a thousand times better." That would allow the military to not only image a ball from space, but closely examine its surface texture—or the beads of sweat on an enemy combatant's forehead. Potential commercial applications include speedier optical data networks and higher-resolution, more realistic maps for personal navigation devices.
Gigapixel cameras and current satellite surveillance. The article lists what can be seen with different resolution and the number of pixels required for facial recognition
High resolution cameras that are available now
Other advanced sensors for detecting nuclear, chemical and biological materials
More on LADAR (laser radar)
LIDAR at wikipedia