after one year of searching and trying solutions, i got my k800 camera working. My camera module was damaged. New module is working fine and no more annoying message of "another application"..

By the way this message come due to many reasons like
1. putting any new camera driver which is not matching with camera. or curruption of default camera driver. (if u want to try, just remove the camdriver0.dat and see, u will get this message).
2. any damage to camera cable flex or in camera itself. ( you can check this by putting a similar camera and see if phone is working fine).
3. any hardware ic fault on mainboard (like N3100 crystal). if by putting a new camera u got the same error message, just put the default camera driver. still same problem means there is hardware fault on mainboard.

apart from these there is no other reason and better not waste time looking for silutions. (hard but true) :)