Canon have played a dirty trick with the S90 by putting some pretty heavy noise reduction into the firmware that becomes stronger at higher ISO. Of course that's sort of what you want, but you want to do it outside of the camera ; noise reduction is a lossy operation that kills information.
The worse thing is that all the review sites play right into their hands. They will mention the S90's strong noise reduction, but they also show direct side-by-side images from cameras , eg : S90 vs LX3 and then say "the Canon shows significantly less noise at high ISO". Well fucking DUH. You aren't comparing apples to apples. Then you have geniuses like this guy who say they are doing a fair test because they don't run outside noise reduction software. Well, no that's not a fair test if one of the cameras has more noise reduction firmware. It is clear that the S90 has some kind of newer fancy noise reduction alg in the firmware, like bilateral filtering or something. There's no such thing as comparing the "raw image that the camera makes" any more by not doing post-processing in software, because the cameras all cheat and do different tricks in firmware to make their images look better.
Anyhoo. I was pondering why digital camera noise looks so objectionable. Real film noise doesn't look awful. If you take shots without enough light on a film camera, you get a nice speckly grain. Digital cameras look much worse. I think a big part of it is the uneven color matrix thing that DC's use which gives the noise ugly chroma shift speckles. The only other things I can think of are the clamping to 255 and the fact that we JPEG after noise which smears it into DCT basis functions.
One thing that's a bit perplexing is that printing noisey digicam photos makes them look a million times better. Again I'm not sure exactly why all this is. Surely one reason is that printed pixels are actually little ink blobs that run into each other and blur; this adds an extra physical level of some kind of gaussian like blur, but it's better than any digital blur you can do because it's operating at near-infinite subpixel resolution (aka the real world).
The S90 has a low-light mode that makes images with 1/4 as many pixels, presumably because they're binning 4 buckets on the sensor together to get more light per pel. I wonder if they're actually doing anything better there than what could be done as a post-process. BTW it occurs to me that you could make a much higher quality black & white digital camera if if actually had a sensor with no color filters on it, so every bucket was open to any type of photon; it would have a true pixel at every bucket instead of the funny chroma selection that color digicams have.