Most everyone has a smartphone these days and the quality of the images that they are able to produce are quite good. And they are also so small that they can serve as the guts of a Lego camera. Here some pictures of a Lego camera I built around my iPhone 4.
UPDATE: I've added a video of the build at this link: http://www.instructables.com/id/A-Working-Lego-Camera/
More photos of my camera and a Lego building diagram are available at http://www.nacionale.com/2011/05/lego-camera/