Watchismo has a great and expansive feature covering the history of spy-cam watches. Most of these things are pretty hilarious. Not inconspicuous in the slightest.
The favorite here is probably the Tessina. It’s a rather large watch that features a concealed trap door for the lens. What’s notable is that it still uses standard 35mm film despite being the size of a 16mm camera.
It can could also be had with a Swiss watch attachment which would really throw people off of your spy scent. *cough*
Subminiature Camera Watches – Spy Watches [Watchismo via BoingBoing]