I'm Running 21877 and can't take pictures either. The camera comes up and shows an image, once I press the button it snaps the picture but then I get the 'wait' icon of the looping dots for 1 minute, then it goes back to the live camera view without ever writing the picture to memory.
Tried changing storage location, the review duration and the touch setting - always the same result. Sometimes I get the message "Unable to capture photo. Internal error."
Someone on
http://www.htcwiki.com/thread/2839589/HTC+Touch+Pro+Camera+Problem.+NEED+HELP!!!!!! suggested using chkdsk on the SD card, but mine won't even work without the SD card inserted.