This watch is great for recording a prank or just for spying on someone. You will find spy watches all over the internet for 150-200$, but this Spy Camera Watch will let you have fun with your friends for just $68. Featuring a "built-in pinhole-sized video camera and 4GB of flash memory." Video quality test here.
If you think this is too expensive, you can try this SPY PEN for 32$. It can stores up to 20 hours of video at a time, which can be archived on your computer. Same video quality, but cheaper.
This DVR Pen Camera is a great little gadget. The price is good and it produces very good color video and sound. The set up is easy as long as you follow the manufacturer's simple instructions and install the KMPlayer on your computer. I bought it as a casual toy but now I am going to use it as a backup camcorder when I travel --- among other uses. This is the best "spy pen" for the money.