Is the camera able to Zoom?

The camera has a digital zoom. It hardly zooms at higher resolution pics. But the lower the resolution the more it is capable of zooming.

But it wont zoom in 3mp mode.

I'm not sure what Samsung was thinking, why they would allow zooming in one mode but not another, but it really does not matter. This phone like all others I've seen uses a digital zooming technique, not optical zooming (actually changing the focal length of the lens). imho, instead of taking pictures in 2m and "zooming" you'll be better off taking your pictures in 3m mode and then cropping the image when you print.

The reason it does not zoom in 3mp mode is because that is the maximum size of the image sensor. If you look, you will see that the smaller image size you choose, the more the camera will zoom. This is because the camera is using the extra information available to the image sensor to do the digital zoom. Thus this digital zoom will have minimal to no quality loss.