The trick is to touch the rock button to get a good focus before you press down. The smallest object to get perfect focus is 3 cm. Smaller than that, it starts to lose focus. Video is the same. Decent, few dedicated cameras are able to do this.
Man, love this thing, pro-quality camera, decent FM reception/sound, true standalone GPS for TomTom, VGA for touch browsing with Opera/Mini, watching TV and remote desktop, push Gmail, rightly-positioned speaker for VOIP... it does them all and does them very well, with 4GB storage, 256MB RAM and 533MHz CPU to spare! This 4 oz baby beats my desktop/laptop and for less than $300!