I took a pic for buzz yeterday and I actually was shocked how well it turned out, in low light even:
Reg cam, reg software on droid
Actually, I'm pretty shocked how lousy the picture is - no offense. I have the same issue. For a 5MP camera that has a full color pallete, why is there noticeable blotching and dithering? Is it the software saving the picture after taking it? Look at the area under the sign and above the windows - why is there all that blotchiness? It SUCKS.
I hate to say this but my old 3MP iPhone and my brother's BB take better pictures than this. I tried the 5X ZOOM software and my results were even worse, with noticeable blotchies in all the pictures. There is a lot of detail in the pictures from 5MP but the color and reproduction of the area looks like crap... seriously.