Gum-Sized Micro-Camcorder
Any time a gadget is sold as a "spy" device you know you'll be paying a huge premium for something relatively inexpensive. Don't buy this "Micro-Camcorder" from this store, I'm saying—it's not worth $300. But it is a cute little piece of kit, designed to slide inside a standard pack of chewing gum. It only shoots at 15 frames a second, but with a 1GB Micro SD card you can record up to 33 hours of video (although only for 2 hours at a time before you have to recharge the internal, non-removable battery.)
It's basically a cellphone camera without the phone; since phones with the same capability can be had for almost free, wait for this one to show up in a kid's spy toys product line before buying. I seriously doubt there are more than $20 of parts in this thing.
Work warning: The site has a looping video with sound on it.
Catalog Page [SpyGadgets.com]
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I wonder if a place like Sparkfun might be able to sell the modules to make a similar camera?