A wireless camera may or may not be truly "wireless." Although some are powered by batteries, many actually need to be discretely plugged into the wall or otherwise attached to an electric system. They do use wireless transmission, however, which means that you do not have to run a cable from the camera to the receiver. This can make them more convenient to use and easier to hide.
Detecting the Image
A wireless hidden camera creates pictures like any other digital video camera. Light comes through the lens, which focuses it on a small grid of light detectors. In a black-and-white surveillance camera, each detector simply gauges how much light there is at a particular place in the image. In a color camera, each detector only measures red, green or blue light, and then groups of three detectors are combined to show the color of light in a particular place. All of these individual photo detectors are then combined to make a complete picture. Some wireless hidden cameras also have a motion detector and a motor that automatically makes the camera follow any movement in the room. Other cameras just continue to focus fixedly on the same spot.
Transmitting the Image
Wireless cameras have small radio transmitters on board. The camera turns the image into a radio signal on a particular frequency. The radio transmitter is typically not a large, powerful one, but a small one designed to broadcast the signal to a receiver in the same building. The receiver then picks up the signal and turns it back into an image.
Using the Footage
The receiver can do different things with the image depending on its purpose. If the wireless camera is there for continuous surveillance, the image might be displayed along with the images from other cameras on a bank of video screens for a security guard to watch. The image can also be recorded, either to a computer hard drive or some other storage media. In some cases, the receiver will only store a couple of frames per second, creating a time-lapse picture of an area. This saves storage space and makes it easy to review the tape quickly later.