Eric, are your shots out of focus even when you have it set on AUTO?
In Auto mode the focus should be set automatically.
It's possible that if the lighting conditions outside are quite dim, then the camera could be automatically selecting a slow shutter speed to compensate by letting more light into the camera, then 'camera shake' could be the culprit.
Have you taken any photos indoors with the cameras' built-in flash. This will give a faster shutter speed and should reduce any camera shake problems.
There must be a setting on your camera that needs fiddling with.
Otherwise, if you haven't already done so, take a photo outdoors when it's either sunny or very bright. If your camera has an LED display, it should give the cameras settings at that particular moment - lens aperture, shutter speed, and a few other things. Check your camera manual to see if it shows a Focus Lock indicator in the LED display. This will tell you if the camera is focusing correctly by indicating the Focus Lock readout for each photo you're taking. Note the shutter speed readout at the same time.
I'm not fully conversant with this particular model, only what I briefly read yesterday on a website reviewing it, so I can't give anything really definitive. My Nikon D60 gives such readouts on its LED screen so I'm assuming your camera has something similar.
Let me know how you get on with my suggestions.
Laurie.
