The biggest limitation the Fuji (and any P&S camera) will have is the focus range (or distance to) your subject. Too close and there will be overexposure... too far away and it will be too dark and grainy, even with a flash. YMMV, but this is what I've found in my experience.
Nope, not all point and shoots will perform this way. If you've ever used any of the higher end Canon point and shoots, they are very good in low light situations, even when a good distance away. My Canon G10 rarely, if ever, produces grainy photos. It actually produces better photos than my Panasonic bridge camera, that was twice the price ($500 vs. $1000.00).
We've tried all of the above and still get horrible pics with the Fuji.
Yup, same here, and we also have several higher end digital cameras. Fuji does not make good cameras, IMHO, but as I said, for the little bit of money we spent, it was fine, and my DD8 was able to work it without issue, as it's pretty easy to use.
I figure even if it only lasts a few years, we are ok, as the cost will have been close to a disposable camera. Also by that time, even more waterproof cameras will have come out, so more choice and selection.
So, in answer to the OP's question for suggestion of a good waterproof camera, it would depend upon what type of settings the camera will be used under (indoor vs. outdoor), in order to properly suggest a good camera. I would not classify the Fuji as a good or great camera, but for someone who is only using it outdoors, it would be fine, especially since you can purchase a silicone sleeve for it, which greatly adds to the security features of having the camera/battery cover stay closed. This is the biggest area of problems with waterproof cameras, besides sand on the inside (both Olympus and Fuji told me this).
So for us, we would not spend close to $400.00 CDN for the Panasonic or Sony (there is also a new waterproof Nikon that has just come out), as the battery/memory card cover buttons are very flimsy, as well as we already have several very good digitals, and because we only need it for limited water use throughout the year.
Tiger