Engadget just reported that Nokia has launched the Lumia 1020 with 41

I'd go with D as comparison is correct - Camera of Nokia to that of other smartphone.

Look forward to more 700+ from you Shradhha!

IMO D

In option A,B "it" is ambiguous..
In option C "having" is incorrect.
Wrong comparison in option E

Very nice question. My answer is D for reasons stated below

A. and that it has 20 million more pixels than any other smartphone with a camera --> Two issues: Seems parallel with "Nokia has launched the Lumia 1" and hence does not modify camera. More pixel than any other smartphone is wrong comparison
B. and it has 20 million more pixels when compared to any other smartphone’s camera --> More cannot be used with "compared to".
C. having 20 million more pixels than any other camera in any other smartphone --> verb-ing modifies the preceding clause whereas we need to modify only the camera.
D. a camera that has 20 million more pixels than a camera in any other smartphone --> Correct
E. a camera with 20 million more pixels than any other smartphone with camera --> Compares camera with any other smart phone

IMO D for the reasons below

A. 'it' is referring to Engadget
B. 'it' is referring to Nokia
C. '-ing' modifier changes meaning
D. fine
E. wrong meaning

A - it- has no clear antecedent, if it was suppose to be refer to the camera the sentence make a comparison between the camera and any other smartphone.
B- it- again with no clear antecedent and lack of parallel with no "that" at the beginning. when should refer to a time phrase only.
C- having - modifier that break the sentence , it refer to the whole clause instead of a noun - camera.
D- correct .
E- comparison between camera and any other smartphone.

nice one! it's good to read something fresh,High tech cellphone, instead some biologic and boring story.

But if you see, even a phone can have pixels, not just the camera in the phone. Resolution of phone is given in pixels. So even though I chose the correct answer, I was detained by this fact for several seconds.

Well, you can say that I got into the writer mind, because you are comparing cameras here..Correct me e gmat if Im wrong .

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A. and that it has 20 million more pixels than any other smartphone with a camera
"and" here suggests that both the ideas are independent. "it has 20 million...." is modifying camera, and therefore it is best conveyed using a noun modifier. therefore this is incorrect.
B. and it has 20 million more pixels when compared to any other smartphone’s camera
same as A
C. having 20 million more pixels than any other camera in any other smartphone
this construction should modify the previous clause but is modifying the previous noun. therefore this is incorrect.
D. a camera that has 20 million more pixels than a camera in any other smartphone
noun + noun modifier is employed to modify camera, a noun in the previous clause. this is correct.
E. a camera with 20 million more pixels than any other smartphone with camera
a camera is compared with another smartphone. therefore this is incorrect.

the very basic thing which i noticed is the comparison of cameras
so in A we have it which refers back to nokia
in B also we have same problem
in C we have having which is modifying the smartphone
and E we r comparing camera with smartphone
so D is the best choice

Isn't "D" an independent clause and if so, does not it have "run on" sentence error.

How it is ambiguous ? it could refer only to the camera or to the lumia 1020. Either way, both make sense, so i dont see the problem in saying that the iphone X has more pixels than Y samsung or that the camera of X iphone is better than the camera of any other smartphone

Not og ofc

try removing the modifier to see if it is an independent clause

a camera 'with 20 mil more pixels' is not an independent clause

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