Canon Powershot S3 IS image stabilization help?

Play around with the manual settings. IS only helps up to a certain degree. If the shutter speed is below maybe 1/4 of a second, it might not help at all if you hands are still shaky. You still have to try to hold the camera steady with lower than 1/30 of a second. If you are indoors, set it to Tv (shutter priority) to 1/30 or 1/15 with ISO 200 or 400 and just experiment. You probably don't want to take candid shots of 1/30 or below if people are moving around. Motion will be blurred. You'll need to tell the people to stay still until you point the camera away. If the exposure still comes out way too dark with the shots unusable, then you probably should be using a flash anyway.