I was wondering if there is a way to take a screenshot of the current screen inside the mobile phone using a service (I know how to do it through DDMS though)
Not without root access.
Just for encouragement I would like to say that on Android Developer Challenge 2 there is an application called 'drocap' that does exactly this - takes screenshots on the phone. This is running on my stock european Hero, so no root access required.
But I have no idea how it works. So - keep looking ;)