Grainy results from Canon IXUS III (3) APS Camera

Hi folks,

Has anyone noticed grainy pictures from their Canon IXUS III? We've
just had some films developed and the majority of prints are grainy,
the resulting images are pretty terrible in quality. The films used
were either Konica or Boots (yeah I know we got them free!), all
ISO200 which I figure is OK as an ISO200 came with the camera. Most of
the shots are in perfect daylight and many are landscape shots, all
pictures are the same regardless of lighting and subject matter.

We've since tried the camera with Kodak and Fujifilm ISO400 and the
prints are perfect.

The question I guess is, is the Canon IXUS III APS sensitive to lower
speed film and has does everyone only use ISO400 in theirs? If not
then I guess the camera could be faulty and its 10 days from running
out of warranty cover from the retailer!

TIA, Ben.