There are plenty of legitimate reasons why you would not want your camera to make a loud shutter noise whenever you take a picture, and about the only legitimate reason to disallow it is for perverts, which the vast majority of us are not.
It is therefore a bit unfair that we all have to suffer loud camera noises when taking a picture in a museum for example. If you are inclined to hack your Windows phone, there is however a solution
The below registry edit will force the camera shutter sound to follow the system volume settings, and when this is set to mute, there will be no camera sound either.
The hack is via the big list of Windows Phone 7 registry edits over at XDA-Developers, which also includes instructions on how to perform registry edits on different devices.
Of course, especially on Windows Phone 7, users edit their registry at their own risk.