Cameras are the most common form of visual sensors and I usually see one strapped on the side of the stages as well as inside the separation module to show the separation of the rocket stages. What kind of cameras are preferred and where are they mounted?
The answer is, 'it depends'. Every launcher company uses its own methods.
SpaceX uses GoPro cameras inside the payload fairings (to monitor recovery attempts) and on the landing barge (ASDS). They have more cameras on the stages, but I can't find anywhere that mentions what type of cameras are used there.
There are several instances of GoPros (for example) used on the ISS but that's not a launch vehicle.
GoPro cameras (for example) have been used on rockets in at least two places:
SpaceX video: Falling Back to Earth | HD Footage From Space
A GoPro inside a fairing from a recent Falcon 9 flight captured some spectacular views as it fell back to Earth. Footage is played in real time.
NASA JPL video: LDSD: Supersonic Test Flight (HD)
This answer says:
In the screen shot you can see the boom holding the camera in the bottom of the picture.
All of the sound you hear is real, picked up by the GoPro microphone. You might notice the sound go down in intensity through the main motor burn. That is due to the vehicle increasing in altitude, with the lower densities reducing the sound transmission.