The idea of nanny cams, when put to proper use, isn't bad. While sitters and nannies might not enjoy being on camera, as long as they know ahead of time that the cams are there, it shouldn't be a huge issue. The recordings can protect them as much as the kids.
But there are definitely limits about what the cams should be aimed at and where they should be located. One nanny in New York City is filing a lawsuit over her experience with a nanny cam.