If you search for small batch brewing you will find a ton of great threads on it. There's at least one thread a week discussing it.
You can brew any sized batch you want. I do a lot of 2.5 gallon recipe test batches. You can even do 1 gallon AG brews. The basic brewing guys call that the six pack brew.
A recipe is scalable, so a 1 gallon recipe is 1/5th of a 5 gallon one....a 2.5 gallon one is half the ingredients.
2.5 gallons is one case of beer.
I use my normal 5 gallon mash tun for most of them, but I do a lot of Experiments, test recipes, or beers that I know I won't need/want more than a case of.
I sometimes use an unmodified 2 gallon cooler for a lot of my small btaches it holds up to 4 pounds of grain.
I just us a folding steamer in the bottom along with a grain bag. Just break off or unscrew the center post.
One of these, it helps to lift the grain bag above the spigot to keep the drainig from getting stuck.
I posted a lot of info in the mr beer thread that you may find helpful.
I posted some all grain small batchrecipes here, http://www.homebrewtalk.com/785533-post702.html
ANd a bit of a primer on AG with pics here http://www.homebrewtalk.com/738927-post659.html
But I mostly use my regular 5 gallon cooler mash tun which holds 14 pounds of grains...and 14 pounds of grain for a 2.5 gallon batch can be a mighty big beer.....
One of our memebers chubbykid had plans for a minikeg mashtun http://sites.google.com/site/chubbyk...keg-lauter-tun
THe basic brewing radio guys are big fans of tiny batch brewing...3/4 gallon (1 6pack) in a 1 gallon winejug fermenter.
They demo the 6-pack IPA here
and they also have done barleywines as well.
I ferment my 2.5 gallon batches in all manner of things, I have a 3 gallon better bottle, I also use 3 gallon water jugs, AND my old Mr Beer keg (it's perfect because you can even lager in your own fridge with it when you are starting out.)
You can even ferment a 2.5 gallon batch in a 5 gallon carboy if you want, though I would say a 6.5 gallon carboy is a little too much headspace for my confort.
Hope this helps....any more questions feel free to ask...
Oh, and you don't have to do anything with hops in terms of hop utilization, except scale it in the same proportion, as you do your grain. Nothing else.
Here's some of the threads on the subject.
Oh and there's also a Three Gallon ALL GRAIN AUTOMATED SETUP
that debuted here and ended up in BYO, I'll try to find the link.