I believe the issue is with the zero shutter lag and stock camera app. You see, when you focus on the subject, THE TINIEST MOVEMENT before snapping the picture will cause the subject to come out of focus and make the image look like total crap. This was never present on previous smartphones I've owned; I could always focus, and it would keep the focus before taking the pic even if I moved the phone a little. Not with the nexus, nope.
The result of this problem is out of focus pictures, which in turn (somehow) makes the colors look washed out, which in turn makes the result piss you off. I don't know exactly what it is, but I've narrowed it down to that. It's just very touchy and very hard to keep anything in focus.
And no...I'm not talking about a slower shutter speed where movement DURING the picture will cause a blurry photo. Even with fast shutter speeds, the slightest movement with this camera before or during the shot will cause out of focus subjects.
Now, what I've found is not something that will completely make the nexus seem like a point and shoot camera, but something that will make you feel a little less frustrated. Keep in mind, this is NOT my app, and I am not advertising it for any other reason than it works. I used to be the type of person that hated camera apps besides stock, but nope, not after using the nexus. It's almost needed.
Now here's the thing with this app. You open it (it opens as quick as stock BTW), don't even mess with any of the special effects or anything (unless you want to of course). Just use it as a stock replacement. Now here's the good part....
Once you have the app open, all you do is tap anywhere on the screen and it will focus in on where you tapped and automatically take the picture. What does this mean? No having to tap to focus and THEN move over and his the shutter button like on stock. This reduces the amount of movement after focusing and before the picture is taken.
Now, if you don't want to tap to focus, simply hit the shutter button and it will do an auto focus on the entire picture and then automatically take the picture! No need to press and hold to focus, and then release to take the picture like the stock app. Again, this basically reduces the amount of movement and gets rid of a step, which in turn equals clearer pictures.
On top of that, this app seems to keep it's focus better than the stock app. If you happen to move the phone just after you focus and right before it takes the picture, it does a better job of keeping focus. With the stock app, any movement and your picture is screwed.
In conclusion, this isn't a fix to the sensor (which is considered low quality by some). It just makes your picture taking on the nexus much more easier and enjoyable. Sorry for the long post, but this app has made the camera experience a lot better.
Here is an example I took. My phone was held in the exact same spot for both photos. Touch to focus what used directly on the water bottle label. Notice how the picture from the stock app is blurry (and the kleenex box), and notice how the image from the other app is sharp (even look at the difference on the kleenex box). Open up both pictures, and then keep switching between them and you will see what I mean.
Differences might look minor to some, but the small differences really change the entire quality of the photo. It's a huge difference overall.
Name of app? Camera Zoom FX ($2.99 from the market, worth every penny)
No need to change anything in the app settings, everything comes on auto. I don't even use any of the special effects or anything in the app; I just use it as a replacement for stock.
I hope this post has helped some of you.