Try full auto mode outside in bright sunlight. If it still blurs, then the camera needs to be repaired. Without seeing a picture and its EXIF data (normally invisible info recorded in the digital photo file thatshows speed and lens opening settings, mode,and other info), no analysis is possible. If you are trying to take photos indoors of moving people, that is the problem: you need more light or the flash needs to fire.
The W7 is a nice 7mp camera with a decent lens, but like any camera I would expect blurry shots when in lower light conditions and/or the shutter speed is set too slow. Again, submit a sample with the EXIF data intact and that will provide a wealth of data so someone can help you!