Your iPhone or iPod photo library and camera not working? Crashes? Stuck on Updating / Rebuilding Library? Even a restore or update can't fix this issue? Here's the solution. Unfortunately it involves deleting ALL your saved pictures/videos on your iPhone/iPod library.
Mac users: Connect iPhone to iTunes. Cancel sync. Go to mac application and open Preview. Click File > Import from (your iDevice name) > Select All Images and Delete.
Jailbroken iPhone/iPod users: Download iFile from Cydia. Browse Files > User > Library> Media > DCIM > Delete ALL Images.
Tested and proven to work %100 on SoCoMoCo's iPhone 3GS.