It is indeed the kit lens. There are a couple issues with the lens (barreling), but it's very unnoticable. You'll only notice if you're taking shots of something VERY straight (nothing but horizon, maybe), and even then it's negligible.
Only the total photography geeky-perfectionists think it sucks. It's a fine lens.
Also, for kicks, here's a comparision from .jpg to .png. If you're wondering why I wasn't saving in .png in the first place, it's because Paint in Windows 2000 can't. Yes I was running Win2k :O