Suggest a few options for you Nik.
1- Learn how to use your camera in the best possible way, suggest you read your manual, actually go out and practise and compare the setting results, and read these forums, lots of great advice and information here.
2- if your serious about indoor photography or are just looking for great indoor results, nothing comes close to buying an external flash. Your built in flash, honestly with no pun intended is practically useless apart from creating that reindeer headlight look. Id suggest you buy the canon 420ex speedlight (allows bouncing the flash), or the cheaper option is the 220ex with hotshoe flash cord, cheaper again is the index card trick which is documented on these forums... (once again read these forums). Seriously for indoor shots there is no better option than a bounced external flash. It will enable natural lighting to your photos and hence allow you to set a LOW ISO setting. Good bye noise.
3 - Learn how to use your camera settings. You have a sophisticated tool that is capable of far more than you imagine. Did you notice the EOS DSLR style features incorporated into your camera. No
Its not what camera you use, its how you use it.. why do so many people get this so wrong and constantly think that a more powerful, expensive camera will improve their shooting
??
See it time and time again on these forums.
Your image quality is normal for ISO400... yes iso400 is alot better on DSLR, but their CCD size is full (or larger than yours - as pointed out correctly) size, thats why they cost so much.
If you stick to ISO 50 - 100 you will have no problems. If how ever you insist on using high ISO settings, i recommend you invest in some noise reduction software like Noise Ninja, that can clear up noise in images to an astonishing level. Check ou the post processing section of these forums......
Hope i have helped, btw nice deoderant stick