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The Transparency Grenade you are talking about is the new electronic device that has been developed by Julian Oliver and Susanne Stauch in January of 2012 in Berlin. It has its name thanks to the shape of the Soviet F1 Hand Grenade and made from translucent resin with high resilience level. Metal parts are made from silver and they are all hand-crafted. This is the first model but in the nearest future this thing might be produced massively from common materials.
Inside this surveillance device there are ARM Cortex-A8 computer, which is also called Gumstix, Arduino Nano used for comfortable SPI display control, special LED Bargraph to show the wireless signal level, that is controlled by nice GPIO pin outs made by Overo COM, powerful 802.11 wireless board antenna for network connection, 3.7V battery, 5mm cardioid microphone, 64x32 pixel LCD display that is harvested from the NKK SmartSwitch and MicroSD card with 8Gb memory.
The working principle of this device consists of few phases. First of all it establishes connection with the wireless network nearby, hacking into available websites and stealing server data. After that it must be activated by the user. When Transparency Grenade is activated, the notification of "detonation" will appear on the website at the dedicated server where stolen data was sent. There it will be disassembled to get photos, video- and audio records which would be available online just after any website visitor clicks the "detonation spot" on the map.
As you can see, we have very cool gadget with many potential ways of using it. But in wrong hands it may become extremely dangerous thing. Yet stop worrying because you can prevent Transparency Grenade from breaking into your wireless network and by doing so keep your private data or data of your website users safe and secure.