Which camera should be used for FPV?
Ideally, a CCD camera and not a CMOS one (like a mobius or GoPro), due to the CCDs' better handling of light changes and other benefits.
Probably the best bang for buck is given by the infamous Sony Super HAD II CCD 600TVL Board Camera. Can be had for $26-29 from here.
Note that there are various options to choose from, when buying a specific camera:
The IR blocked version cannot see IR light, so during the day its colors are nicer, and probably you can see some more detail. The IR unblocked version can see IR light, so during the night it will see more stuff and it will be easier to fly with it.
The board camera version without case is light but hard to mount. The plastic case makes this easier. The metal case is heavier.
The mini version of the camera is lighter and smaller but has not been as rigorously tested as the normal version. And it's more expensive, too. So if you don't need the small size/weight, why not go with the normal version?
Read the descriptions of each camera to see the options available. Usually links to other models are given there.
"Isn't this 1500tvl camera better?" Yes, it may be higher resolution, or even have better performance at low light, or be cheaper. But keep in mind that all of these cameras sometimes cause other problems. Sometimes they emmit noise that will make an on-board GPS unable to see satellites, or a UHF LRS receiver to receive adequate signal.
In short, if you have time, read various discussions and reviews about each camera on fpvlab.com. If you have money AND time order 2-3 of them and try them out. If you want something that just works, is very well tested and does a very good job, order the 600tvl camera above!
The 600tvl camera (CC1333 etc) has been tested for GPS and UHF noise, and found to be very quiet. Also, Chris tested it for low voltage cutoff, and found out that it still works at under 9V, although it is NOT advisable to run it that low!