I've recently purchased a 2.4 GHz video camera from BoosterVision.com. I haven't flown it yet, I'm working on a rocket that will carry it. I think there are a few drawbacks to wireless transmission, and there are a few drawbacks to internal memory. The drawbacks to wireless transmission are that the video quality isn't always that good, and the rocket can only go so high before the signal to the ground is lost. The drawbacks to internal memory include reasons like if the video camera falls out of the rocket or the rocket is lost, you don't have the video of the flight. Also (this may just be my experience), some digital video recording devices can't take the stresses of liftoff. My Flip Video F260B kept coming back with its memory blank, but after a bit of troubleshooting I discovered the batteries were coming loose under the high g-forces. This could probably be fixed with a little soldering, but the camera is now in the grave.
I tested the video camera out in my RC helicopter, and it worked fairly smoothly. The video is on VHS, and I'm scratching my head wondering how to get it onto the computer. The receiver can also be plugged into a camcorder, but I haven't tried that yet.
Here's a video from YouTube of a hybrid rocket. I can't tell if this was taken from a transmitting camera or an internal memory digital camera, but it does look rather clear. Hybrid rocket motors are pretty unique. They combine a liquid oxidizer with a solid fuel. The fuel is usually a simple substance like rubber or even paper, and the oxidizer is typically nitrous oxide, commonly known as "laughing gas." Before launch, the oxidizer tank has to be filled from the LCO desk about a minute before launch. When ignited, the two substances mix together in the cumbustion chamber to create a bright, smokeless flame and a loud roar. Hybrid motors tend to be even louder than standard solid fuel motors using ammonium perchlorate composite propellant, and have a unique quality of roar, as you should be able to hear in the video: