I'm not sure If this is a hardware or software issue so I don't even know where to post this. However, I just flashed CM 10 (and I feel that the power users linger here more than the general forum) so I'll start here.

Whenever there is motion, the camera preview screen lags horribly. I can see waves, horizontal waves. When I record video, this weird wavy lag is also recorded.

 

I didn't know how else to include the video, so here is a YouTube link:

VID 20120820 4399 - YouTube

 

No, that's the thing. I have never really taken pictures or recorded with that much motion before so I can't tell if it's a new problem or if I've always had it.

I just got a car dock and noticed that when I switch to the camera when I'm driving (I swiped the wrong way to unlock once) there is this very bad wavy effect on the preview screen.

I switched to the video camera, and decided to record to see if it would appear on the recorded video.

True, but I figured I'd post because fixing a force close is usually a completely different problem.