I don't think the weight would be a problem so much as it's affect on the CP of the rocket. With larger diameter rocket's you can attach a camera to the outside of the tube, but the Commanche 3 is skinny and I'm afraid attaching a camera to itwould make it unstable.
The keychain camera is small enough, though that you might be able to mount it inside the body tube or, at least, mostly inside the tube.
BTW, reviews have suggested that the 4GB version of that camera takes better videos. See:
I haven't seen one of those little cameras up-close yet, so I can't be specific. But, I think you could build a small payload section for the rocket with a slot or hole in it that the camera sticks out of.