You can definitely get very small, high-quality spy-cams, but you pay the price for great quality in miniature. I have a Veho Muvi, but haven't tried it out yet. I need to film some random nonsense just to get an idea of the quality. It has the green/blue light, but it's on the top of the camera, so you can install it somewhere and the light wouldn't be visible. There are other kinds of objects that would be better for hiding a camera, like a clock on the wall. It would be difficult to place a watch in a place where it would be inconspicuous for filming an encounter. They make stuffed animals and other things that can sit in a good spot for filming and not seem out of place. Lipstick cams are great because you can put them inside something and only have to cut a small hole for the lens.
"The best kind of pride is that which compels a man to do his best when no one is watching."