The way the app works, is it rapidly lights you up from various angles (top, bottom, left, right) using the screen itself, and synchronizing that with the camera capture. Unfortunately that method doesn't quite work the same with external lighting.
(I didn't realize this until I tried it out myself)
Oh ok, I kinda figured it did something like that but I wasn't sure. That makes sence. Oh well I'll just have to wait until I get an iPhone 4... Or 5