There are several test videos on youtube already. One most advanced system that i have seen is from Phoenix Aerial. They have small LIDAR under their Octo copter and they are getting nice readings out from it.
Phoenix is not only system that people are working. There are several others too.
Will we ever have small and "cheap" obstacle avoidance for quads for example... Really hard to say. Then again what is cheap?? Some years ago we talked about 10.000+ USD for small lidar and now prices are closing 1.000+ USD or so.
Pretty impressive, wonder if they have mapped this whole area with that short range lidar they have mounted on octacopter. Still $1,000 for the unit is an overkill if only used for obstacle avoidance unless you do some 3d Mapping with it like they one on the video.
There are some cheaper units but I guess they are not so fast or sensitive. There was this discussion lately that shows a cheap implementation Neato like based lidar.
I saw DJI put one out for developers. It's not cheap but I but love to figure out how it ticks.
Tell me the code please