I have not seen these kinds of Java applications. It is not impossible to create one, but it requires taking images one-by-one from the camera, drawing them and the special effects on the Canvas separately, as Series 40 phones do not yet support for example OverlayControl from AMMS API (JSR-234) which allows you to draw on top of the video.
ahh ok.. I guess this could be a challenge for all those java developers. I think the s40 phones specially the s40v3 platforms lack (and i think there is none) video and image editing applications.