The other night while watching TV (I think Inside Edition was the show) they did a story on bicycle theft. And they had a bicycle equipped with a tracking device from a site called
BaitBike.com. They're working with law enforcement to deploy bicycles that have been outfitted with their trackers to catch thieves red handed with the goods. The reporter purchased a nice Specialized bicycle outfitted it with their tracker and locked it up. The first person who attempted to steal her bike wasn't successful in getting past her cable. The next day (I think) a couple was successful in stealing her bicycle and they were able to track them down. The gal ran off leaving the man holding the bag.
They called the cops on him, and they came out and arrested him, as surprisingly he stayed on the scene and waited for the cops to show up.
One of the options that they have is as I've suggested building the tracker into a taillight, called a "
spylamp." Another option is to place the tracker into a
threadless headcap.
Both are good ideas and places to hide a tracker. From watching the video on the threadless headcap version it has a "dongal" that one uses to arm it. The taillight version uses either the taillights on/off switch to arm the tracker or a second on/off switch to arm it.