It has a 3.2 megapixel camera, pics will look absolutely spot on with a 17" monitor, as regards the mp3 capabilities, afaik, it has pretty much the same functions as the latest walkman handsets.
Really is an amazing phone, forget what camera's you have used on any previous cam phone....this WILL blow you away, I haven't taken a dodgy/blurry shot yet, and I've even tried to.....it has a proper digital cam flash so even in a pitch black room you get an awesome pic. I used to have a 3.2mp Sony digi cam and it's not had any use since I got this phone.
Its a good Camera phone compared to other phones but the quality of the pics are quite low still.
Yes, it can focus but because of the compression SE have used the shots tend to look soft. plus there is a lot of CA.
Its handy for the odd snap if you have good lighting but its not a good camera as such.
This was taken with mine, good from a distance but rubbish close up. plus its been through PSCS2.
All the shots in the linked thread above are very average looking shots quality wise but are still above most other phones.
Its a very good phone though. one of the best i have had and the first time ive not had a Nokia