What are your requirements for video quality? If 640x480 is good enough for you, what you want is a keyfob camera, they're little spy cameras that are intended to look like a car remote fob. They're very small and about $20.

There have been a number of threads on these cameras in the last few weeks. Here is one fairly definitive guide:

http://www.chucklohr.com/808/

NOTE that as far as I can tell, ALL of these cameras are 640x480. The ones that list higher resolutions are just upsampling from 640x480, which means all they're doing is converting to a blurrier image with more pixels that takes up more space on the memory card.

If you're looking for real HD quality, you probably need to go upmarket and I haven't seen anything in that form factor. FWIW, HD is really necessary in a traffic situation if you want to reliably be able to read license plate numbers of cars passing you.