Here's an example of a somewhat common geocache container - it's called a bison tube. This sort of geocache is usually hidden by hanging it off something (note the "key ring" loop at the top). We have occasionally found these hidden hung from branches near the trunk of small pine trees or bushes (though they can certainly be hidden other ways as well). They blend in really well and can be quite a tough find! In this picture, the bison tube is (obviously) open (to close it you would screw the two pieces together) and you can see how small the log is - it's all rolled up so it can fit inside. This is an example of a geocache where you have to bring your own pen or pencil to sign the log.
This is a different geocache, and the container in this photo is not exactly a bison tube (it was a somewhat unique container), but this photo shows how a geocache might be hidden "inside" a tree on a branch, or I think this one may have been hanging from a small hook: