The trick is very simple for showing the loading screen in phonegap application.You Just need to call activityStart function of the notification.
For hiding the loading screen in phonegap just call activityStop function.
The loading screen is very helpful while making Ajax call or while using the inappbrowser.It is really useful when loading the external link in inappbrowser.It is useful because you can not create a loading screen through your HTML in client side if you are loading the external link.Because inappbrowser overlay on the application.You can show the loading screen when loadstart events fire in Inappbrowser hide it when loadstop events fire.
Here is an example of loading screen with inappbrowser.
This phonegap loading screen only works with the android .And if you will touch the screen The loading screen will get hide.