Arduino instant camera (Camera + Thermal Printer?)

Would it be possible / practical to create an arduino instant camera? There isn't enough memory on the chip to do store pictures, but perhaps I could interface with a cheap digital pinhole camera and get the data 1 line at a time, then covert it into bitmap and send it to a thermal printer.

If yes, which camera should I use, that will allow me to get one line of pixel data at a time, send it to the printer, and repeat?

I haven't done it, but I've read threads here where people have read image data from serial cameras, and others where they have sent data to a thermal printer. The main limiting factors I would think are that the Arduino doesn't have much bandwidth so any transfer operation would need to be quite slow, and how much of the image needs to be held in memory at a given time in order to convert the incoming image data to the required output format. To work that out, you'd need to understand the protocols and data formats used by your devices.