When I was a kid, we were told that the camel's hump was for storing water. Later I learned that the hump was for storing fat, as an energy source when food was scarce. Even later, I learned that water was produced during the process of digesting the fat. This is what allows animals like Kangaroo Rats to live their entire lives without drinking any water. Even later I learned that the amount of water produced by the metabolism of the fat is not enough to make much difference for an animal the size of a camel, so we are back to the hump serving as an energy supply.

Why is all that fat stored in the hump? Fat is an insulator, which is why many arctic animals have thick layers of fat or blubber. In the desert, you want to get rid of as much body heat as you can, which means that you don't want your fat in layers on your body. By having its fat in its hump, all of the insulation is between the camel and the noon day sun, leaving the rest of the body relatively uninsulated so body heat can escape.