The Swann PenCam takes video and photos through a pinhole-size lens above the pocket clip. It has a built-in microphone and saves video as AVI files. It holds 2 GB of data, and transfers through a USB port, accessible by unscrewing the center of the pen. Comes with three ballpoint refills and retails at $99.99.
It doesn't require software. A tiny LED light shines blue on the back of the pen to let you know the picture was taken or the video is recording, and all you have is one clicker on top that takes the images. A very small switch is located inside the pen that flips between camera mode and video mode. And when it plugs into your computer, it's just like any USB storage drive -- there are folders marked for video and photos that you can open and save.
But remember -- this isn't going to give you great quality video. The resolution is 640 x 480 pixels; many cellphones take better video than this. There are no settings that can be adjusted.
Also I should stress that you can get into trouble for using this. It's illegal in Florida (and many other states) to record someone without their knowledge when you're not in a public setting. Just last week, the general manager of Atlanta's Hartsfield-Jackson International Airport got in hot water after using a pen that records audio (called Livescribe) at a meeting with Delta Airlines.
If a passerby couldn't naturally overhear a conversation -- say for
example, a closed-door convo in a business meeting -- there's
expectation of privacy, and secretly recording that can get you in trouble.
Bottom line: It's incredibly simple to use and the quality was a little better than I expected. But when you get into legal trouble using this, don't say I didn't warn you.