Ok. Here's a quick guide on how to disable the red led FOREVER.

1. Download "adp1653-kernel-kp49.zip" from here. The work is from maacruz (should click thanks for him). You should have kernel-power v49. I don't know if it works with kernel-power v47 or 48 (because it's not my files). If you use stock kernel, download the "pr13" file, the procedure will be almost the same.

2. Extract adp1653-kernel-kp49.zip, copy "adp1653.ko" to /lib/modules/2.6.28.10-power49

3. Copy the following code into a QBW and make it run at startup

sh -c 'echo "sleep 1; echo 1 >/sys/class/i2c-adapter/i2c-2/2-0030/disable_indicator_led" | sudo gainroot'

4. Reboot.

5. Try the camera.

Note: Basically, the script will change the value of /sys/class/i2c-adapter/i2c-2/2-0030/disable_indicator_led from 0 to 1 at startup.
If you don't want an extra QBW, try to change it yourself with leafpad. Reboot and see if the value stays at 1 or changes back to 0. If it stays, then you won't need the QBW.

So it didn't work for kernel v48. You can restore everything by reinstalling v48 (or just copy the file adp1653.ko back if you had backed it up). Anyway I use the latest v49 and it work great here.

sorry for the noob question, anyway / method we can close the recording app and only leave the xterm running under spy mode.

hmmmmmm making it more secure!!!!