I'm not sure, the film used was 8mm (16mm film sliced down the middle) so was much smaller than regular camera film, so an enlarger would be needed to make decent sized prints. Eddie Albert's photographer character undoubtedly had access to darkroom and developing equipment. The shutter speed was 1/50 sec and had a couple different aperture settings (such as f3.5) which combined should produce a decently sharp bright image in bright light (daylight). It had a 15mm lens which was very wide angle so portrait-style people photos could be distorted. The better quality Minox subminiature (spy)camera of that era (1950s) supposedly could produce very good images.
It wouldn't be that surprising if the movie depiction of what a spy camera could do and produce as far as quality images was overstated some. It's a movie! and Fun!
Some more fun fact tidbits:
http://www.faqs.org/espionage/Bl-Ch/Cameras-Miniature.html
http://www.vintagephoto.tv/echo8.shtml
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