The issue is likely a bad lens assembly. Consumers wishing to repair this can check ebay for a replacement lens assembly, motor and sensor are usually included.
This happened to my Samsung s700 while I was mucking with it recently. It can happen when the lens meets severe resistance while trying to open, thus damaging the lens. The camera turns on and cannot tell precisely where the lens is, and subsequently the camera leaves the CCD imaging sensor turned off.
Replacement is easier than repair as lots of intricate parts are involved. However, the centermost ring will pop off with a little force, revealing four screws. The screws on the back side of the lens assembly are pretty obvious. Best of luck to anyone trying to fix this rather than replace it...