As you are building out your WP7 applications and trying to utilize either the PhotoChooserTask or CameraCaptureTask you may run into a bit of some ‘odd behavior’ if you try to run your code on your physical device but not on the emulator. 

The odd behavior is that your launcher code will work just fine on the emulator, but will return immediately with the TaskResult == Cancel when testing on your device while tethered (thanks to @smartyp for helping me w/ this).  The issue appears ONLY when your device is tethered (maybe has something to do w/ Zune).  Of course you can only debug when the phone is tethered making for some fun circular dependencies to resolve in order to debug :)

I guess for now you simply have to test/debug the launcher code via the emulator and not the physical device.

The blog below will guide you on how to use the launchers

http://blogs.msdn.com/b/rickyt/archive/2010/08/19/launchers-and-choosers-for-windows-phone.aspx

I hope this helps other solve the mystery of why they cannot open their Photo or Camera task on a device while tethered.

Till next time,