I was having the same problem after I deleted all my previously sync'd photos using ImageCapture.
This solved the issue:
http://my-iphone-blog.blogspot.com/2008/04/my-iphone-ran-outa-film-fix.html
1. Make sure your phone has been synchronized in the version of iTunes you are using.
2. Restore your phone. (in itunes in the summary tab click the restore button)
3. After JUST the phone settings are restored, DO NOT restore your personal information from a back-up. It will prompt you for this, don't close this screen just hold off on it for now. Disconnect the iPhone and take a photo. The photo should now appear in the camera roll, as usual.
4. Reconnect the phone and import the photo into iPhoto; do NOT delete it from the iPhone. (after importing it choose "keep originals")
5. NOW go back to itunes and restore your personal information from a back-up.
Now your iphone will have everything on it, and picture taking works again.
Thanks to my twitter friend @KinfolkinAZ for pointing this out so quickly