What I need is the best small dual recording recorder (by dual recording I mean the ability to record the lav to 2 separate channels, 1 at one level, and another one lower volume level, in case the actor yells and clips/blows out the sound).

As I understand this one has it http://tascam.com/product/dr-2d/ , if you want something really small (ala Yamaha recorders), you can get mike with self power (like http://www.personal-view.com/talks/discussion/10718/boya-lavalier-with-battery#Item_3 , of course you can get more top mike) and make small padding cable where one channel go direct and other via padding circuit.

I also need the best lav mic that has the closest to zero handling noise as the actor may be moving vigorously with animated gestures. What would you recommend. (No wireless lavs here, I'm looking for hard wired.)

I think it is more dependent on mounting skill and not on mike. All the mikes I know if they rub against something they are pretty bad. As I remember Rode make cool thing - http://www.rodemic.com/accessories/invisilav

@Vitaliy_Kiselev For Handling noise, my problem is that I've been using a Tram TR-50, and just a slight movement of the wire itself causes noise. (I was able to isolate the mic head with a homemade version of the Rode inislav.) So I really need to find a good lav mic (wired, not wireless) that has very little handling noise. Tascam dr-2d is good suggestion for the recorder. Thanks.

@Rambo @Vitaliy_Kiselev To use an attenuator cable (same as padding cable?), don't I need a recorder that has 2 mic inputs? The Tascam dr-2d and Zoom H1 both only have 1 mic input I believe. I like the idea though, because then I could get a 20 db attenuation box that @Rambo linked to here which might be safer than the -12 offered on the DR-2D safety track.

Thanks.

As vK said, the input is stereo so you already have 2 channels. You will need to do a few tests, I found -20db too much attenuation but might be ok if the actor is really yelling. Just watch mic overload if you mic close.

I'll probably risk reinforcing my amateur status by mentioning this but I've also used a cheap resistive inline headphone volume control to attenuate mic inputs before, not perfect but does give some variable adjustment at the risk of being a source of noise.

So if I get a cable that attenuates/pads one of the 2 channels, will it still be able to supply/transmit "plug-in power" to the lav mic? Thanks!

It can have issues, you better ask someone who made it. This is why I told about using mike with his own power.

Once it is available this might be just what you are looking for:

http://www.bhphotovideo.com/explora/video/news/adorable-juicedlink-little-darling-distributed-audio-recorder