Oh, I think thats the more expensive one too. I think it is probably not playing well with some jailbroken app or jailbroken functionality you have on the phone. I would get rid of any jailbroken camera apps you have and try again, most likely the cause
I had an issue with my photos/camera/camera roll when I saved a picture off Digg. I could view the photo, but it would freeze everything camera related once I opened the picture. Only fix was either, reboot the phone or just not view that picture.