Here\'s my Manifest:
In your case the attribute android:configChanges="orientation|screenSize|keyboardHidden" should go to the first tag and not the tag.
For the other people having similar issues simply add screenSize to android:configChanges="orientation|keyboardHidden" or change the android:minSdkVersion attribute to 12 or lower.
A more detailed explanation of this behavior can be found here: http://groups.google.com/group/phonegap/msg/c771fffc4dd9daaf