I figured it out...

I totally out smarted myself with the new camera.  On the bus ride in I finally read the manual for the camera.  It is a great point and shoot but you can do a lot of manipulating of it as well.  One of the settings that you can change is the shutter speed.  Our camera goes as fast as 1/1600th of a second.  This is the iso 1600 setting.  At my birthday party I was assuming that people would be moving around a lot, so to compensate I set the iso to 1600.  In the dimmer restaurant lights it basically didn't get enough light so the photos were a bit gray.  According to the manual, when you use the higher iso settings it sometimes creates noise in the picture.  I am assuming that the grayness of the photos is the noise that the high iso setting created.  I will set the iso to auto tomorrow for Christmas and see what happens.  I still need to play around with the scene settings as well.