Your picture doesn't look too bad. I see four screws in the corners to remove the cover. We'll see if that's all to get to the camera.
I just had a look in the service manual of the HTC Magic (I won't link to it here, just google). If the Hero is similar built, the camera module can be physically removed.
I don't think that the Android OS will be a problem. It should recognize the absence of the camera on the next boot.
Has anybody seen a service manual for the HTC Hero?