Must be you Cal, mine seems fine...
Don't forget mind, 3.2MP refers to the number of pixels in the image, and therefor it's size, rather than the quality of the image. Take the Nokia N95. 5.0MP camera. The quality is fantastic for a mobile phone, but even just a 5.0MP point and click is far superior because of sensor quality.
Back to the point though, what settings are you using? Mine is almost always set to...
Shoot Mode - Normal
Scenes - Auto
Picture Size - 3MP
Focus - Auto (Macro for close ups)
Flash - Auto
Effects - Off
White Balance - Depending on prevailing light
Metering Mode - Normal
Picture Quality - Fine
The rest is irelevant. Make sure the lens is clean too, it gets dusty. Give it a wipe with a soft, dry, cotton cloth.
Hope that helps