Canon compact cameras have a long history, and the company knows its market well. So JPEGs from the IXUS 1000 HS tick all the boxes; the smart metering system copes well with a range of exposure conditions, and colours are rich and well-saturated without being garish.
As mentioned, the quality lens and well-executed optical zoom ensure impressive image quality too. The biggest niggle we found was white balance, which can be eccentric on Auto mode. It struggled with indoor lighting too, but this is also a quirk of Canon SLRs. It's reliable enough outdoors though.
ISO performance is reasonable for a £300 compact without being earth-shattering; sure you can kick it up over a thousand but noise and smeary colours are very noticeable. Despite its 'high sensitivity' claims, the Canon IXUS 1000 HS's ISO performance isn't noticeably better than its peers.
We were impressed by the Auto mode, however, which is smarter than most, and knows when to change to portrait or macro settings, for example.