Is there a device which acts like an accelerometer but only measures absolute velocity? I could integrate the accelerometer's output but errors quickly accumulate and cause problems. Preferably the device is available in a MEMS based chip and is low cost. I could use a GPS device (and am currently, with success), but this is expensive, bulky, and requires a GPS link, which is not available in all circumstances.
There is no such thing as absolute velocity; velocity is always relative to something. Velocity cannot be measured internally to a chip (as can acceleration). You must have external input, such as radio references a la GPS or sensors detecting changes in other phenomena external to the chip and its vehicle.
As has already been said, there is no such thing as absolute velocity, however STM make a 3D motion sensing chipset (iNEMO). Details of the evaluation kit here