Not sure what it is with the stock Camera app that came with the Droid, but I think the camera takes really good pictures.. IF you use the app FXCamera.
Download it, try it out, its free!
I've been testing pictures with it and the stock camera app, and I can easily say that this app is 100x better than the "camera" app. The only thing that sucks is that it doesn't use the flash, so some pictures, unless it's in natural light, comes out pretty dark.
I'm hoping that the actual camera will get fixed with the new software update, but if it doesn't, I know that I'll be using this to take pictures from now on.
They're releasing a DROID version out soon, but in the meantime, this version works fine with the Droid.
try it out and let me know what you think.
Also, I thought this should go in the Applications thread, but I think more people (especially those that are mad about their picture quality) will find it useful in here.