The answer appears to be that camcorders make poor digital cameras. Nothing you did wrong.
I have been taken pictures with my new Panasonic SDR-S26 but find the quality of the pictures is very poor. The images are not "sharp" and the overall picture seem almost blurred/hazy. I returned the camera and got a replacement thinking the camera was faulty, but still get same results. Can anyone offer any help or guidance, or is the what I should expect from a camcorder?