one thing you can look out for as far as grainyness goes is the simulated film speed (iso). the idea behind iso is that as the number goes higher, you have more light (and therefore faster shutter speeds) but more grain as well. the goal is to take pictures with the lowest iso possible, but sometimes you take the tradeoff of grain because it's better than a blurry picture that comes from handholding/slow shutter speed in low light conditions
it may be that the camera is just poor with grain but it's something worth looking at
as far as which camera is better, i'd say always go with the one with the better zoom unless the image quality is unacceptable or the resolution is under 2mp (which i don't think exists today). i'm going to give you the same advice i gave someone else in another thread:
i'd go with the most zoom possible, as extra reach is always a valuable thing. i've printed 8x10's with a 2.1mp camera that came out very good and i'm extremely picky about image quality. the real advantage of having tons of resolution is so you can crop. in this situation, i don't think you'd need it as there's not too much you can't frame correctly with a 10x zoom. the way i see it, if you can't make great pictures with a camera that flexible without cropping, it's the operator that needs improvement.
if you do decide you'd like to have more resolution and a great zoom, there is always the olympus ultra zoom series (as you mentioned). far as i know, they don't have IS which is a shame because it really is good technology. olympus' original ultra zoom (the c-2100) had IS and that was an excellent camera (i owned it).