While I cannot definitively confirm that the CAM-007 is the world's smallest commercial camcorder spycam (see exhibit A and exhibit B), the self-contained device does clock in at a minuscule 0.3"x0.9"x0.5" and it boasts a fairly impressive feature set that includes both audio and video recording, MPEG-4 3 GP at 15fps, a built-in rechargeable lithium ion battery that recharges via USB (up to 2 hours of recording), and Micro SD up to 2GB with room for approx. 19 hours of video on a 1GB card. Available for $US349. [Product Page]
CAM-007 Touted as "Worlds Smallest Camcorder, Spycam"
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