Here's the current consensus from the Australian Cancer Council:
Nanoparticles and sunscreen
Nanotechnology has been used in sunscreens for many years. To date, our assessment, drawing on the best available evidence, is that nanoparticulates used in sunscreens do not pose a risk. However, we continue to monitor research and welcome any new research that sheds more light on this topic.
Sunscreen formulas and their components are regulated through the Therapeutic Goods Administration (TGA). In early 2009, the TGA conducted an updated review of the scientific literature in relation to the use of nanoparticulate zinc oxide and titanium dioxide in sunscreens.
The TGA review concluded that:
The TGA's report concerning the safety of sunscreens can be found at:www.tga.health.gov.au/alerts/sunscreens.htm