It may be just the lens that's not so good. The kit lens that come with the Canon 350D is pretty bad as well, if you would judge the body based on that lens you would be pretty disappointed. You have to try it with a more expensive lens, and usually a fixed focal length lens ("prime lens") has better sharpness than a zoom lens.
But first make some more thorough tests, to make sure it was simply not an autofocus error, or a shutterspeed that was too slow, causing the blur.
Last thing, the consumer level point and shoot cameras usually have defaults which artificially increase contrast in the picture and so may give the impression that they are sharper (exactly like the Unsharp Mask filter does in PS), so it's better if you make tests with a chart.
Here is a simple test you can make to see if the lens focuses properly:
http://www.canon-dslr.com/Canon_Jan05/C ... s_Test.htm
(test chart for printing:
http://www.canon-dslr.com/Canon_Jan05/F ... target.pdf)
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