First, go into Settings, and choose Applications.
From the Applications menu, choose Running Services.
When shown the list of Running services, press the Menu key to show the option Show cached processes. Select Show cached processes.
Scrolling through the list of cached processes look for the Camera app and select it.
When you select the Camera process you will have the option to Stop it. Choosing Stop should successfully release the camera hardware.
After stopping the cached camera process, return to your home screen and try relaunching the camera app or whatever other app you were trying to run when you ran into the "Camera Failed" error message. It should now successfully start with access to the camera.
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