Isn't that a pretty old camera? Technology has helped quite a bit over the past few years, but the nut behind the camera is still a big part of it.
Most cameras have a tough time with white balance indoors. Even "good" ones including dslrs. Here are two available light shots (I almost never use flash):
Two different point and shoot cameras. The second one is pretty close to the "true" colors of the couch and curtains.
If you are taking pictures indoors of static objects (ie no people that are moving), then image stabilization is your friend. As is higher ISO although that will also increase noise. This was shot with fire light and some background ambient (at night)
This is indoors, no image stabilization, ISO 800
You also will need a fairly wide lens. Effective 28mm at least (and 24mm would be even better).
You might want to consider a Ricoh GX-100 (the above pics were with a Ricoh GRD2, which is a fixed lens compact). It has 24-72mm zoom, image stabilization, and will output RAW images. But a newer Canon might be "easier" to use (the Ricoh has an auto setting that is fine though).