I have the same pen cam that you got at Wal-Mart. For onboard videos, I use the Dolphin Pen Cam (looks exactly the same) because it is easier to use than the Wal-Mart camera. I found that the camera fits great inside the Estes BT-55 tubing. I would recommend going out and getting a CC Express kit, cut the tube into a 6 tube and a 12 tube. Take the 6 tube and make a tube coupler or buy one for the Bt55 tubes. I found that if you wrap tape around a film canister, it works great as a tube coupler. Cut a square hole in the 6 tube so that the camera lens can see out. On the opposite side of the tube, cut another small square hole so that you can use a scrap balsa piece or something to turn on the camera/ set it to video mode. Once you have the holes properly cut and in the right position, you will need to make a mirror on the side if you want video looking at the ground. I went to Hobby Lobby and bought a 5 pack of ¾ mirrors for $1. I used 1/8 balsa to make the frame. Take the mirror and glue it to a piece of balsa wood so that you have 1/8 on only two sides (opposite from each other). Next, cut out two triangles that have that have a base of ¾ and a leg as ¾. I have found that a 45 degree angle works good for getting the rocket and the ground in the video. Glue the hypotenuse of one triangle to the edge of the piece that has the mirror on it. Do the same for the other triangle. Glue this whole assembly to the side of the rocket over the hole that you cut out for the lens to see out. When you glue it on, try to make sure it is aligned with the hole and if you look at the mirror from the bottom of the rocket up, try to make sure that you can see the hole that you cut out and that it is centered in the mirror. Now that all of this is done, you just have to come up with a way to hold down the button so it can take video. To do this, take one of those Estes launch keys that has the black top on it. Drill a hole in the base of the nosecone and put the metal piece in first so that only the black top of the key is sticking out. You may have to build up or sand the black top depending on how close or far down the camera is. When the rocket is put on the pad (you would need a second person to launch it for you) you would hook up the igniters and check to make sure there is continuity. After that, turn on the camera. While doing that, tell the person to put the key in the controller and arm it. Set the camera to video mode, put the nosecone on and secure it with a plastic rivet or something so that the nosecone stays secure while holding down the button on the camera. When you hear the camera taking video, run away and yell out launch. The other person will press the button and off the rocket goes. If I remember correctly, the camera only takes 8sec of video so you probably wont get any video after ejection because of 2 reasons:
1) video wont last that long
2) Ive noticed with my rocket that when the ejection charge goes off, it moves the nosecone a little and causes it to let go of the button. This could also be because I put a screw eye in the tip of the nosecone and attached a shock cord there and attached the parachute to that. The shock cord that leads from the booster is attached to the base of the camera bay. It is set up like this so that if you have a mirror on the side of the rocket, you can still get video of the ground even after ejection because the rocket is still held in a vertical position. It may have let go of the button because the plastic rivet doesnt always keep the nosecone from moving and when the parachute inflates it pulls on the nosecone a little causing it to let go.
One day I flew one of my video camera rockets on a C6-7 motor and that delay turned out to be longer than I thought. The 5 sec put it right at or barely after apogee, so I thought that 7 would be OK. WRONG! The rocket impacted the ground about 1 sec before ejection. The camera was nearly destroyed. One your camera and my Dolphin camera, the plastic button on top is just a plastic piece that gets pushed down on top of a button that is soldered to the circuit board. Well, on impact (nosecone first) the launch key that I used to hold down the button shattered the top of the camera and ripped the button of the circuit board! I had a friend solder me a switch back on instead and it makes video a lot easier because instead of having to have something hold down the button, you can just flip the switch and that is all there is to it and you can even get video after the ejection charge because this way you dont have to worry about the button getting let go of. I would recommend that if you dont mind having your camera opened up, have you or a friend that has god electrical and soldering skills to solder you a switch in place of the button. The only modification to your rocket if you use a switch is that you will need one more hole cut in the rocket so that you can turn the switch on or off. Well, I hope this helps. I will include a picture of one of my camera rockets and a close up of the mirror so you can get an idea of how it is made and set up. BTW, if you build the rocket like I described way above by modding the CC Express, use only C motors and a 3 sec delay. 5 sec will work but I dont recommend this if you get nervous easy because ejection is after apogee a good bit. Well, good luck and hope to hear how you progress is.
P.S. windex the mirror before you launch it. It really makes the video more clear and launching around noon to mid day will have the best video results!