High-powered single-mode infrared VCSEL diode may be a good idea, but still, how about the eye safety? That's the only question. So, 1 or 3 Watts 850nm IR LED may be better for safety reasons. (P. S. IR VCSEL over 100mW is difficult to find - been having trouble finding ones, whenever I found it and asked, all I got was a NO.)
Also, I am not surprised about line in the IR vision video as I had 200mW 808nm IR laser diode, any multi-mode, multi-emitter diode will do that.
I personally would just experiment with optics until I can shrink the line into circle (hard and pricey but may be the best solutions for some fincky hardware such as IR camera), or just try a few diodes until I can find one acceptable.
P.S. Duh, I forgot about the fiber-coupled laser diode. :yabbem: It may provide better result since the fiber forces the laser emissions into single mode (depending on core diameter). eBay might have a few you can try. Be sure to try with "sealed" lense module as you want it to be spreaded out to the surface to be illuminated.