I'm experiencing the same thing, too. The first pictures I took in indoor lighting with the flash, and I was surprised how washed out they looked. I compared the pic to a similar pic I took with an 8-year-old Nikon Coolpix 2500 2-megapixel digital camera, and the Nikon was noticeably better. This dissapointed me, since the Epic is new and 5-megapixel.
However, I should mention that the Epic pic file is 45k, and the Nikon Coolpix is 408k in size. I'm new to the camera, and very confused how it works, and so I assume that maybe there's a default setting somewhere that controls the size and/or resolution of the pics. But, come to think of it, for a smartphone 45k is ideal because it's easy to send by email and bluetooth, and quality is really a lesser consideration.
I've tried to include the above-mentioned pics in this post. You can probably guess which is which by looking at them.