I had a Coolpix for about 2 weeks and ended up returning it. I had the same problem, they're really bad in low light and the flash is terribly harsh. If it's too late to return you could probably sell it for nearly what you got it for since it's new.

I ended up getting a Cannon A710 IS and it's amazing (basically all the pictures in my gallery were taken using that camera if you want to check them out). It's got manual options too which is really great, and the macro feature works better than most little point and shoots I've had. New they go for about $500 but since there's the A720 IS out now (and maybe another model since I was looking) a bunch of people sell them used on ebay etc... I got mine for about 135 and that was a year ago, they're probably cheaper now. Plus it takes AAs (rechargable or regular) so you don't have to worry about being stuck without a charger or having your camera die if you're somewhere without electricity. My other cameras are film SLRs--I've never bothered getting a better digital because with that one you can get some pretty high-quality stuff--especially if you've got photoshop (although I've barely needed it with that camera).

http://www.amazon.com/Canon-PowerSho.../dp/B000HATNH4