(FORTUNE Magazine) – Jeffrey Sonnenfeld learned about surveillance cameras the hard way. The business school professor and self-styled leadership sage had just defected from Atlanta's Emory University to rival Georgia Tech when the new job offer was suddenly withdrawn. Atlanta papers reported he had been caught on videotape vandalizing the offices of the retiring Emory dean whose job he had wanted. (See First for details.)

If Sonnenfeld had read the tabloids, followed the Boston au pair trial, or seen a few episodes of The X-Files, he'd have known that eavesdropping technology is becoming ubiquitous. And if he'd searched the Internet just once for "spy equipment," he would have found dozens of online retailers offering miniature recording equipment at a pittance--as well as countersurveillance devices that might have warned him he was being watched.

Thanks to an explosion of technology, the tools for eavesdropping have never been cheaper, smaller, more powerful, or easier to come by. They're no longer limited to government spooks or law enforcers. These devices are turning up in warehouses, stockrooms, offices-- even in the executive suite--with striking frequency. Spy paraphernalia now ranges from supersensitive microphones hidden in pens to video cameras that will fit in a pager, smoke detector, or clock radio, or behind a tie.

Although the proliferation of surveillance gear raises legitimate concerns about the erosion of privacy, one benefit of smaller-faster-cheaper video and audio recorders is that regular folks can afford to protect themselves. Claims of sexual harassment can be supported or knocked down by taping the situation with a microcassette recorder the size of a credit card in your pocket. Or negotiations with a customer who changes his mind often can be managed with a hidden recorder. It may not be a building block for a trusting relationship, but you may avoid getting stuck with unwanted goods.

Spy stores are filled with feature-packed audio devices: microcassette recorders with voice-activated recording, super-long-playing modes, and sensitive hidden microphones, such as a $99 pen mike offered by 007-Eleven, the mail-order retailer of surveillance devices that supplied the gizmos pictured on these pages (www.007eleven.com).

The most impressive advances are in video technology. Cameras are being squirreled into every kind of device, including telephones, pagers, motion detectors, ceiling speakers, thermostats, picture frames, desk lamps, eyeglasses, and wristwatches. A basic black-and-white camera not much bigger than a quarter sells for $145 at 007-Eleven and can be hidden behind a tie or under a baseball cap. An add-on wireless transmitter for just $299 sends a TV signal to a VCR up to 500 feet away. If you really want portable spyability, $1,100 will get you the world's smallest videotape recorder, the Sony EVO, which fits in a small fanny pack or in the small of your back. Today's cameras can peep through an opening of only 0.0625 of an inch, making them virtually undetectable.

The ethical issues of secret taping are thornier than the legal ones. In most states only one party to a conversation must consent to taping to make it legal. (Maryland is among the few that require the consent of both sides, which landed Pentagon aide Linda Tripp in trouble for taping Monica Lewinsky.) By contrast, planting a bug to eavesdrop on other people's conversations is illegal in most states except when done by law-enforcement agents with the proper warrants.

A twist of today's technology is that it's far easier to record someone without their knowledge than to know if you're being recorded. Spy shops are filled with bug hunters, little devices that supposedly pick up signals emitted by recorders. But they're all expensive ($200 and up) and not necessarily reliable. "When it comes to knowing if you're being recorded, there's no silver bullet," says Ed Thomas, co-owner of Tritech, a New Jersey company that trains law-enforcement personnel in the use of surveillance equipment. "None of those little 'debugging' gadgets work."

Sophisticated equipment used by professionals in countersurveillance can detect many spy devices. Products costing $500 and up will sniff out radio transmissions, and devices that will detect pinhole cameras hidden in walls also exist.

The U.S. government has cracked down on the sale of hidden transmitters, which are illegal for civilian use. Last summer federal agents raided dozens of stores selling spy equipment. However, these tiny transmitters were hot sellers, and experts say there are plenty of other gadgets to take their place.

A bigger concern is how socially acceptable eavesdropping has become. "It's amazing how widespread it is in business," says Howard Goldman, owner of 007-Eleven. "A lot of my clients are the owners of privately held companies or people in management in large companies. They go about purchasing this stuff the same way they buy office supplies. They research the product, get the purchase order, discuss the terms. It's all very normal, which seems almost abnormal--that surveillance equipment has become so institutionalized."

With technology feeding the human impulse for voyeurism and lust for business advantage, it may be best to assume you'll be captured on tape--something Sonnenfeld and Lewinsky failed to do.