The key to taking good pictures on the iphone are: good lighting, steady hands, still objects. If you're shooting in a dim room the shutter on the camera is slower and will result in blurry or really dark pictures try to take pictures outside or in a well lit room, if you move the camera you will definetly get blurry pictures it's just way too sensitive, and if the object/person you are trying to take a picture of are moving this could make the picture blurry too. Hope this helps.

There are some apps in the app store that can really help make crappy looking pictures look pretty descent. Camerabag and photogene are the ones I use all the time.