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Beth,
I think you have one of the same problems I do with my Sony DSC P72.
I'm no camera maven, but I've noticed that the lens warps badly at the edges of the frame. Centering the picture on the frame but not taking it to the edges helps considerably, and then I crop in Photoshop. When I crop, I can prove to myself that the picture is indeed now back to square. I can see along the bottom edge that you have a curvature similar to the one I get.
I'll do a few shots and post to the camera area showing all the hoops I'm jumping through with this puppy. Not today, but soonish.
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