Well not hobbits per se but a species of human that could easily have been a real life equivalient of a hobbit. Recently discovered in discovered in Indonesia by Peter Brown, a palaeoanthropologist at the University of New England in Armidale, Australia, this new species of human has been named Homo floresiensis after Flores, the Indonesian island upon which it was found.

Standing approximately 1 metre tall, evidence suggests that they were present as recently as 12,000 years ago. More intriguingly local folk tales have them existing and cohabiting with modern humans until relatively recent times. If these folk tales are true then they were still alive when the Dutch colonised Indonesia.

One local story tells of them stealing a baby from a nearby village and it being traded back for several bales of straw.

If these tales turned out to be true then they raise the remote, but tantilising, chance that a small group may still be living in the more remote and unexplored parts of this large tropical rainforest.

The ethical and moral dilemmas that would surround a discovery of this nature are fascinating. We would have to reconsider what it actually means to be human. Our view of ourselves as being somehow different and apart from the animal kingdom would take another battering. A concept such as cannibalism, for example, will need to be completely rethought.

The biggest question of course would be "What do we actually do?"

Do they have "human rights" or do these rights only apply to our version of being human?

If they were on the verge of extinction do we have the right (or the obligation) to attempt to save them or is this a form of eugenics, a concept that has been completely discredited following the atrocities of Nazi Germany.

If they are discovered The Green Man thinks that the major monotheistic religions, Christianity, Islam and Judiasm, are going to have quite a bit of sorting out to do as to where they stand and what is the status of these new humans vis-a-vis the possesion of a soul and related matters.

For a scientific but still readable take on this see Nature
If mainstream is more your style then see The Australian.