If you watch the video on the site you'll see that they fixed a tiny camera to it, though no info on range / data transfer rates.
There doesn't seem to be a hardware encoder and the CPU runs at 72MHz max. I'm not sure what kind of encoding you can perform with such limited resources. Not to mention there are no camera interface.
It has a USB bus however, so you might hook a smartcamera there if it's lightweight enough.
I'm not sure how much you can lift with it tho, I'm guessing not much.
You're thinking too literally. There's no reason for the video to be digitally encoded or transmitted. This is a microcopter, but larger ones can carry full size cameras: http://www.youtube.com/watch?v=OsqAoELpmFQ
I suppose putting a camera on it should be doable - but wth 250kbit/sec @ 80m, is it enough?
That'll probably give you 320x240 video (assuming that anything more than that will be too intensive to encode), which might not give you enough visual acuity to remote maneuver the quadcopter. Any thoughts?