(FORTUNE Small Business) – Surrounded by four brightly painted helicopters in his Southern California hangar, Alan Purwin could pass for a Hollywood hero about to embark on some dizzying special-effects adventure. And Purwin has actually appeared in blockbusters, having designed and flown aerial stunts for Pearl Harbor and many other films through Helinet, the helicopter-leasing company he founded in 1987.

Purwin, 43, flew Helinet's first helicopter in the TV series Air Wolf. In 1989 he transported his first human organ, a heart, for a transplant operation. Since then Helinet has flown more than 30,000 organ-transfer missions for six area hospitals. Each year Helinet choppers transport some 3,000 sick children for Los Angeles Children's Hospital. Purwin has also ferried CEOs, celebrities, and politicians from Ted Kennedy to Arnold Schwarzenegger.

But Helinet is making its biggest mark in aerial imaging technology. The company's ability to capture high-quality footage from the air has won it a loyal following among TV news producers and, increasingly, law-enforcement agencies that use helicopter cameras for criminal and homeland-security surveillance.

Helinet grossed $21 million in 2003. This year the company expects a 33% net profit on revenue of $30 million. About half of its sales come from leasing camera-fitted helicopters to television stations across the country, which use them to capture footage of everything from traffic jams to police chases.

Aerial imaging has come a long way since the early 1990s, when TV stations were still sending intrepid cameramen aloft to point traditional analog cameras out of helicopter windows. Today most helicopter camera lenses are embedded in a gyroscope beneath the helicopter, allowing them to shoot steady images from any angle. The lens is wired to a camera inside the helicopter, which then transmits the data to a receiver on the ground using microwave technology.

Last year Purwin bought a controlling interest in Cineflex, an aerial-camera startup that had developed the first system capable of transmitting high-definition digital imagery from a helicopter without loss of quality. His timing was impeccable, since the television industry is now engaged in a massive shift to the high-definition digital standard. Even hardbitten industry veterans describe HD's quality as a revelation. "It's like I've used a typewriter all my life, and all of a sudden I'm working on a computer," says Don Perez, technology chief of KUSA in Denver.

In March, KUSA made the first live Cineflex broadcast, beaming aerial footage of a Major League baseball game. KUSA is one of 21 stations owned by Gannett, the national media company. Perez says that Gannett chose to test in Denver because its residents tend to be early adopters of new technologies.

Helinet developed its technology for electronic newsgathering, the industry it knows best. But anyone who has watched aerial TV footage of a car chase can imagine Cineflex's potential as a crime-fighting technology. "We realized it would be a phenomenal tool for homeland security and law enforcement," says Helinet's president, Ace Pomianek.

A federal law-enforcement agency that Purwin wouldn't name recently ordered two Cineflex systems and plans to spend some $4 million on Cineflex equipment in 2005. And Los Angeles County is one of several jurisdictions that are considering Cineflex for their police departments. "It's like the commander is directing a movie; he can warn the hostage negotiator where someone with a rifle is hidden," says Arthur Kassel, senior special advisor to the Los Angeles County sheriff.

While news producers and cops swoon over Helinet's technology, privacy advocates fear that it will be misused. "We're eroding people's sense of entitlement to privacy by subjecting them to surveillance from dawn to dusk," says Barry Steinhardt, director of the ACLU's Technology and Liberty Project.

Although law-enforcement authorities need a search warrant to conduct surveillance on private property, federal law currently permits photo and video surveillance in public places. And that has the ACLU worried. "Technology like this is developing at the speed of light, but the laws are back in the Stone Age," Steinhardt says. That's bad news for both criminals and law-abiding citizens who don't think the government should have the power to track their every movement. Nor is it clear that society benefits from placing such a powerful tool in the hands of any private investigator or industrial spy who can afford to lease a Helinet chopper. But in the post-9/11 world, it seems unlikely that Congress, states, or localities will try to outlaw Helinet's technology.

At presstime Helinet was the only company to offer a helicopter fully loaded with an HD camera system and a pilot. But Purwin faces a competitive threat from FLIR Systems of Portland, Ore., a large imaging company that supplies infrared and daylight cameras to broadcasters and the U.S. military. Cineflex was founded by a former FLIR engineer, and FLIR has since developed its own integrated HD helicopter system, the Ultramedia III HD.

FLIR is already taking orders for the system but won't actually deliver before January 2005. Still, the company insists that it won't be late to market. "Although this product has been in the works for many years, TV stations are by no means lined up for HD technology," says Larry Krieg, FLIR's national sales manager for broadcast products. Back at Helinet, Purwin is skeptical that FLIR has really mastered aerial HD transmission. "Our industry is so small that everyone already knows we've done HD first," he says.

Meanwhile Purwin has already filmed the world's largest collection of aerial HD stock footage. He recently partnered with Footage Bank to provide images of the Grand Canyon for a bank commercial. Helinet expects its footage-licensing business to yield about $1 million in 2005 revenues. Helinet's medical-transport division is outfitting a helicopter's interior with HD cameras to show doctors on the ground the state of their arriving patients; L.A. and Dallas children's hospitals will be using them by year-end. And for its new customers in law enforcement, the company has designed a camera, due this December, that shoots in both HD and infrared, and can overlay the two.

Purwin has come far since his stunt-pilot days, and even further since high school, when he hung out in helicopter hangars, fascinated with flight. "I never in my wildest dreams could have imagined I'd have a company like this," he says.