This cell phone has built-in Android 2.2 Froyo. It is not possible to update it, although there are people who installed Android 2.3 Gingerbread. Unfortunately, like many phones in 2011, it has very little internal memory, which greatly limits the installation of several applications. It is almost mandatory to root it.
My ZTE N721 takes 1536 x 2048 photos, so It has 3mp no 2mp as you specify.
i suggest you can have a try with ZTE update tool. you can log in their official website zte.com.cn, and you can find the software under technical support.
I hope it can help you solve your problem.