now that i think about it, Cowboy Bebop is right on the money. You already have a great camera (according to the 800 reviews on amazon). sorry man, it's likely user error.
I second macalu's rec of the Panasonic Lumix ZS-7. I did a ton of research and it was by far the smartest move based on the same requirements you have (might have to pay 280 or so) I bought it in November. My friends/family with DSLR's were impressed with the quality of picture and video I could get. The optical zoom is incredible for the size of camera. Not to say it's DSLR quality, but it's really great for a point-and-shoot It was awesome on vacation, and it's been awesome at home.. I can't stress enough how impressed I've been with this camera. (I used to have a Sony DSC-P7, then a Canon PowerShot SD750IS...or maybe 700IS, I forget which)
Don't change settings using the camera's options. Take a flat photo and use a photo editing software to juice it up.
I know this is probably the best advice. The reason I'm looking though is because then lens on my SD1000 got damaged, so I'm in the market for one anyways.
