in any mode but Auto, press the select button. scroll to my color settings. Scroll to the left one to custom. Press menu and scroll down to sharpness and bingo.
its the little round button in the center of the big dial on the back of the camera. the word "FUNC SET" is printed on it.
press the "func set" button one time, this give you the function menu. scroll up and down in this menu until you get to the custom color menu. its between whitebalance and bracketing. scroll all the way to the right to the capital C - press the MENU button to setup. now by pressing up and down you can scroll through the settings, when you get to sharpness press left to set it to -2 then press menu to get out and save the setting.
Yes, I did the -2 on sharpness as well. then shot at 200 iso, and in PS, added about 190 % on the unsharp filter. works great. reduces a lot of noise, and what has been called smearing. resolution is great, noise at 200 comparable to my 20D at 400. I'm a happy camper !!
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I would not change any settings if you are happy with the results out of the camera. I have not used it enough yet to know if I am going to change the settings. It works good as is for a family point an shoot at factory defaults.