It's not here yet, but it's definitely on the way:

Police found a so-called "skirt cam" under a subway grate at 88th Street and Lexington Avenue Tuesday afternoon after a woman called police saying she had noticed suspicious wires protruding from the grate as she passed by.

Emphasis yours truly.

Once Wifi is ubiquitous, there will be no "suspicious wires" to betray the location of a camera, and cameras will continue to get smaller and more power efficient (though there is a physical limit on how small the lense can get). Consider this a glimpse not just of womens' undergarments (assuming they're wearing same), but of the future.

There may be a physical limit to the size of a single lense, but as computer power grows, we might get simple light detectors placed in close but separate locations as a networked array, rebuilding the image from several discrete chunks of data. Plausible?

Very plausible, V-man. Similar techniques are already in use to compile side-scan sonar images from multiple echoes.

As for the wireless micro cameras- I can see the IRS signing up to buy them by the freight container.
The only problem with extreme 'Big Brother' paranoia is that there are not enough people to watch all the people all the time.... unless everybody ends up watching somebody else- which is pretty much how Castro's 'neighborhood watch' system has worked in Cuba for the past 45 years, without any microelectronics.

The multiple sensor technique makes sense IF you can preserve phase information, so the signals can be combined coherently. This is easy to do for sonar, and doable for microwaves (in VLBI astronomy). For light? You'd need to operate in a very narrow frequency range, and detect the interference between the incoming light and a reference beam (as in holography). This might be feasibly stealthy in the near-IR or near-UV.

Still though we are talking about even current cameras being very very tiny.

Being that these are for theConsumer mer Market they are relatively large.

This isn't a technology of tomorrow, it exists now. It just may turn out that in this particular instance we have a pervert that was slightly behind the times.

Maybe that's how we got to see Saddam's underpants? Really important stuff.