How to fix the camera on the iphone 4

Problems like this are most likely in the software of the iPhone. When it happens with a MacBook camera, you can fix it most of the times by dumping the PRAM upon starting your computer (command option P R), but that's not possible on your iPhone of course. You can however try to simply reboot your iPhone, and that might even fix the problem. You reach the off-switch by holding the sleep/wake-button for several seconds.

If that doesn't work, we'll reach the next step for fixing most software-related problems: restoring your iPhone's software (what does not mean that you have to get rid of all your personal data). simply let iTunes run a full backup first, then click the restore-button on you iPhone information screen in iTunes. After restoring you will be asked if you want to put your data back, and the problem will probably be fixed.

If that does not fix your problem you might want to consider taking your iPhone to a Genius Bar (if available in your area) or send it back for repairs (if you are still in your warranty period).

This is a hardware problem. This comes up when the ribbon connector from the camera to the main circuit board comes loose or gets disconnected altogether. If you have the right tools and enough DIY skills to open up your iPhone, it's a very simple fix that should be fairly obvious to see. Otherwise, the Apple Store should be able to repair it for you (I would think free of charge, but who knows).

If you do want to take apart your iPhone and attempt the repair yourself, PowerBook Medic has some really nice instructions for taking apart all versions of iPhones from 3GS and above. They also sell replacement parts and will repair it for you as well if you want. (Disclaimer: I have no affiliation nor prior experience with this company, so use at your own risk.)

This is what the front camera of an iPhone 4 looks like:

That little white/silver part is what's probably come loose; just pushing down on it gently should allow it to snap right back in.