I created AVD on my Windows 7 laptop with a processor: ARM (armeabi-v7a) and set the front and rear cameras to "Webcam0".
When I started the emulator and pressed the camera button, it will show "Unfortunately, the camera is stopped"
I followed all the answers posted on SO on this, but no one worked for me.
1) I checked the webcam drivers, and this is normal, since the latest version of my webcam drivers was released in May 2012 and they are updated
2) I checked all the parameters (emulator / webcam0) on the front and rear cameras.
3) I cleared all cache data from the camera and restarted.

`05-02 08:03:46.653: E/CameraService(66): CameraService::connect X (pid 1051) rejected (invalid cameraId 0).
05-02 08:03:46.660: E/CameraHolder(1051): fail to connect Camera
05-02 08:03:46.660: E/CameraHolder(1051): java.lang.RuntimeException: Fail to connect to camera service
05-02 08:03:46.660: E/CameraHolder(1051): at android.hardware.Camera.<init>(Camera.java:497)
05-02 08:03:46.660: E/CameraHolder(1051): at android.hardware.Camera.open(Camera.java:342)
05-02 08:03:46.660: E/CameraHolder(1051): at com.android.camera.CameraHolder.open(CameraHolder.java:131)
05-02 08:03:46.660: E/CameraHolder(1051): at com.android.camera.Util.openCamera(Util.java:267)
05-02 08:03:46.660: E/CameraHolder(1051): at com.android.camera.Camera$4.run(Camera.java:1100)
05-02 08:03:46.660: E/CameraHolder(1051): at java.lang.Thread.run(Thread.java:818)
05-02 08:03:46.660: E/CameraHolder(1051): --------- beginning of crash
05-02 08:03:46.666: E/AndroidRuntime(1051): FATAL EXCEPTION: Thread-107
05-02 08:03:46.666: E/AndroidRuntime(1051): Process: com.android.camera, PID: 1051
05-02 08:03:46.666: E/AndroidRuntime(1051): java.lang.RuntimeException: openCamera failed
05-02 08:03:46.666: E/AndroidRuntime(1051): at com.android.camera.Util.openCamera(Util.java:272)
05-02 08:03:46.666: E/AndroidRuntime(1051): at com.android.camera.Camera$4.run(Camera.java:1100)
05-02 08:03:46.666: E/AndroidRuntime(1051): at java.lang.Thread.run(Thread.java:818)
05-02 08:03:46.666: E/AndroidRuntime(1051): Caused by: com.android.camera.CameraHardwareException: java.lang.RuntimeException: Fail to connect to camera service
05-02 08:03:46.666: E/AndroidRuntime(1051): at com.android.camera.CameraHolder.open(CameraHolder.java:135)
05-02 08:03:46.666: E/AndroidRuntime(1051): at com.android.camera.Util.openCamera(Util.java:267)
05-02 08:03:46.666: E/AndroidRuntime(1051): ... 2 more
05-02 08:03:46.666: E/AndroidRuntime(1051): Caused by: java.lang.RuntimeException: Fail to connect to camera service
05-02 08:03:46.666: E/AndroidRuntime(1051): at android.hardware.Camera.<init>(Camera.java:497)
05-02 08:03:46.666: E/AndroidRuntime(1051): at android.hardware.Camera.open(Camera.java:342)
05-02 08:03:46.666: E/AndroidRuntime(1051): at com.android.camera.CameraHolder.open(CameraHolder.java:131)
05-02 08:03:46.666: E/AndroidRuntime(1051): ... 3 more
`