Building a Hidden Camera controlled by an arduino

So I'd like to build a camera, that can take a picture (ie no video for now) when activated by some outside stimulus (like a motion sensor for example), and I was originally thinking about trying to get a CMOS Camera, hook it up to the arduino, and have the arduino send the data to an SD card. I've read a lot about how it's super hard to do it this way due to the fact that you have limited memory on the MC, so you'd have to store it somewhere else, like in a FIFO RAM. I guess what I'm wondering is would it just be simpiler to hack a part a simple point and shoot camera? Since I've never taken one of these apart before (shame on me) I'm wondering how "small" I can get the sensor, so that it meets the criteria of being hidden? I'll be able to hide the electronics to do the processing away from the sensor, but I'd really like the camera sensor to be a small as possible (ie not at all noticable, when 10 feet away for example)

Any help? I know this probably isn't the best place to post this topic, so if the mods think it needs to be moved, please do. If you think going the route of a CMOS sensor would work, any idea what ones would be easiest to interface with, and give good hi-resolution images with? Anyone had any especially easy time with any particular camera on the market? I'm happy to buy and hack anything.. as long as there is a reasonable chance of success.

What about using one of those little keychain cameras like this one? Won't store the images on a removable memory card, but at least you can use USB to retrieve them.

You could also get a normal P&S and remove the LCD and case to get the size down. Of course the next bulkiest part is the optical train, and you can't remove that without sending image quality down the tubes. But there are some very slim P&S cameras out there for ~$100 now.

Good ideas, but I don't think the keychain camera's will give me the resolution I'm after, nor will a usb connection really work, but thanks.

Regarding the camera, by "Optic Train" do you mean the lens, that usually sticks outside of the case? I'm thinking I might be able to hide that behind the hole in the plastic I'm thinking of putting it into... just not sure as of yet.