I have had a lot of success using this with EXTREMELY small bluegill.
Size 10 tru turn hooks. I just rip off a piece of nightcrawler and thread it on the hook shank, and have the end of the worm barely cover the hook point. Might want to add a few small split shot to make casting easier.
Caught about 100 small gills in the last two weekends this way. I just made sure I reeled in very slowly to keep the hook moving as a precaution to make sure the hook wasn't in danger of being swallowed. The long shank made hook removal pretty easy.
Out of the roughly 100 gills, 2 of them were pretty tore up / gut hooked. I have also tried using small size 12 salmon egg hooks in red (just bare hook) with some success, but that is a little more difficult to remove.
I highly recommend the tru turn hooks in size 10
http://ttiblakemore.com/shop/index.php?main_page=product_info&cPath=3_32&products_id=214Size 10 owner mosquito hooks would probably work pretty well also. I tried size 8 but it was a little too big.