Pictures are shadowy with panasonic tz3

If using flash try turning down the ISO setting to 100. Also change the White balance to the Indoor setting if you cannot manually set that.

First, here's a link to a free download of your manual. You should review it from time to time and consult it when you're stuck on a problem. The page numbers in my answer refer to this document.

The settings that impact overall image quality are:

1) ISO Sensitivity (Page 51). This is the sensitivity to light. A properly exposed picture taken at ISO 100 could be taken at ISO 400 in just 1/4 of the time. This means if the subject is blurry at ISO 100, you'll have a better chance of "freezing the action" if you shoot at ISO 400. Overall, the lower the value, the better the picture. Lower ISO values are ideal for bright, sunlit pictures. Higher values tend to be grainier, and are better suited for dark, overcast days and indoors under artificial light. I found shooting my DMC-ZS3 that ISO higher than 400 are too muddied for my liking - try the settings to see what is acceptable to you.

2) Picture Size (Page 52). Pictures that are set for 5M, 6M and 7M (5, 6 & 7 Megabytes respectively) contain a great deal more information than a picture taken of the exact same subject at 0.3M, 1M and 2M (300kb, 1 and 2 Megabytes respectively). A seven megabyte (7M) picture holds over 20 times more information than the 300kb (0.3M) picture of the same subject. This can be hard to detect on our small screens in the camera, but when viewed on a computer monitor, it starts to become noticeable - quickly. Viewing on a 17" computer screen is 8 times larger than the 2 inch screen of the camera - this is effectively "enlarging" the picture.

3) Picture Quality (Page 53). The TZ2 offers just two resolution settings. Standard and Fine. The Fine setting saves the most information possible about the picture and is much better choice than Standard. If high quality images that can be enlarged is what you're after - Fine should be where you leave this setting. Standard can be good choice for web graphics and simple 4x6 prints if you wish.

These settings do come at a cost however. In the example above, between the 0.3M and 7M pictures, you could take twenty (20) very low quality pictures on the 0.3M setting OR a just single high resolution picture in the same amount of space on the card. This means needing to carry more SD (or SDHC) cards or larger capacity SDHC card if you find you current card is filling up too fast with the high resolution / quality settings.

I hope this helps and good luck! Please rate my reply. Thank you.

Be sure you are using an auto mode. Have the white balance set to "auto wb"...the ISO to "auto ISO" or somewhere between 100 to 400.

I found 2 different Lumix TZ3 cameras.
http://www2.panasonic.com/webapp/wcs/stores/servlet/PNAEndecaSearchCmd?N=779832097+250033510&Ne=&Ns=&Nr=12001&No=0&Ntt=tz3&Ntk=SupportSearch&URL=vSupportSearch&cmTag=false&cm_sp=&cn=&catalogId=13401&storeId=15001

In the manual, I couldn't find a reference to a bluish color.

In FAQ's, I found the following:
What is “Intelligent Auto Mode” (or IA Mode)?
“IA mode” automatically activates MEGA O.I.S., Intelligent ISO Control, Face Detection, Intelligent Scene Selector, Intelligent Exposure, and Quick Auto Focus to match your subject and shooting situation. IA Mode is a great mode for beginning photographers
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http://www2.panasonic.com/webapp/wcs/stores/servlet/vSupportHowToGuideDetail?storeId=15001&idval=UCM_STG_CNT_032308&catname=Lumix+Digital+Cameras&title=How to Take Better Photos

Stop using the IA mode. Just use normal picture taking mode with auto flash.

Without flash the DMC TZ5 still does well. The photo has a good level of detail. It also has a natural look to it. Once again there is that bit more colour in the shot than I am used to seeing.

The way Panasonic manage the ISO settings is a little different to other brands. With the DMC TZ5 you set the maximum ISO rating you wish to use and then the camera is intelligent to work out the actual setting. This tends to produce better results than with other brands in most situations.

Hope helped.

hmm it would be easier if i could see this for you

I suspect you have got it on the wrong setting and it is overexposed. Have you got it on auto? what ISO (film speed) is it set too if you set it too low any bright liht will cause clouding like a film of white milk on the screen. Set it to 64 or 100 and the aperture to F8 and take a pic to see if it improves.

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The TZ series is not known for good indoor pictures. T Z is short fot Travel Zoom. The is great for outdoor pictures and long distance shots.

Indoors, be sure you use flash and your subject is within 8 feet so flash light can reach them. Let the camera select the proper settings using the Intelligent ISO setting.. Or set it to Night slow shutter speed) while holding the camera, and subject very still for 3 seconds after shutter press, and with Image Stabilization on.

Also, don't forget if you are viewing the pics on your big screen PC, then the pics will always look worse than they will either on your Camera screen professionally printed pix fo 5x7, which will likely be fine to acceptable. If you get up to 9x10 printed sizes, then you will likely see what you would see on a large PC screen....not very good.

There is a chance you have a bad camera. If it is under warranty, take it to a panasonic repair center locally. I am afraid if you send it off to a depot, they may charge you while declaring nothing is wrong with it.

• Try using the auto intelligent mode on the camera.
• Ensure that it is not in 'Macro' mode.
  This is used to take close ups (3-10cm in range)
• Ensure the lens element is clean.
  

If you can adjust the ISO sensitivity to a lower number then the graininess will be reduced.

However, by reducing the ISO, you will need a slower shutter speed and a larger aperture. A tripod, table or other support may be necessary.

The "noise reduction" setting on the camera can also be adjusted a step up.

Taking pictures at full resolution and fine compression will also help.
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Overall, at least try lowering the ISO, and using the flash brighter.