It's unfortunate you are encountering problems with the app. This is pretty much beyond my control as Apple controls how apps get installed to the phone. However, we can try to work around the issue!
Can you download the app directly from your iphone using the App Store app? Try this by searching for 'Camera FX!' and tapping 'Buy'. Don't be alarmed, Apple keeps a record of the apps you have bought and will not charge you a second time to download the app.
Are you sure the phone is a 3GS and not a 3G? Do you have a background in the Springboard (where you launch all the apps from) or is the background black?
Are you sure you are running iOS4 on this phone? In the 'Settings' app, tap General->About and ensure the version says "4.0 (8A293)"
I understand the last two questions sound basic but sometimes it is worth double checking.
I hope we can resolve this quickly. Thanks for trying out Camera FX!