PLEASE HELP- why does my camera have such grainy images?

Question:

PLEASE HELP- why does my camera have such grainy images?

I reccenty purchashed a Cannon Power-shot S3 1S, it has 6.0 megapixels, and I set the image quality to superfine, and the pictures are size 1600X1200. Before I had this camera I used an old sony snapshot camera with 2-3 megapixels, and I find my old camera actually produced much better quality pictures! See, the problem is for some reason which I can't possibly understand (I'd REALLY appreciate some help) the picture quality is awful on manual, (I can't figure out what I'm doing wrong!) but a bit better on auto, but still not too good. On my old camera I experimented with manual, and the pictures turned out rather well. Here, they keep turning out very grainy.
Here's an example;

Picture of a cactus taken with manual;
http://i26.photobucket.com/albums/c107/f...

Taken right after with auto;
http://i26.photobucket.com/albums/c107/f...

The auto one is okay.. but I expected much better for 6 megapixels? Please, what am I doing wrong?

Best Answer - Chosen by Asker: When shooting in manual, you must manually set all functions including apeture, shutter speed, ISO [which you can set to auto], and white balance [which you can also set to auto]. The first photo, taken in manual, has a high ISO setting of at least 800. High ISO=noise. When you shoot in auto, all functions are set automatically including ISO to whatever the camera deems neccessary to get a good exposure. For most indoor shooting situations, ISO100 to 400 is good enough, 800 or higher will allow for slower shutter speeds in cases where there is low light and you do not want to use a flash, but this will cause more noise. In my opinion, you're better off using your flash power compensation to lower the flash intensity a couple of stops and you won't need a high ISO, set it to 100, retain good color saturation and sharpness and taking a couple of stops out of the flash will tone down the highlights usually associated with a flash. You're only going to have a range of not more than 12 feet with the flash anyway, so be mindful of it and your ISO as raising your ISO will allow for blur free images despite the noise. If you can choose auto for your ISO control, do it. One less thing you have to set. If you are not sure how to set these functions, read your manual or shoot in a semi-auto mode like aperture priority. There is nothing wrong with your camera, reset user, happy shooting.