ISO for 'auto' setting in misc. cameras?

[Tom Nugent Jr]

After years of happiness with my Nikon CP 950, I'm buying a more 
modern camera to get better shots of my recently minted baby 
daughter.  :-)  I'd done a bunch of research a month ago, and 
yesterday went out to my local camera store to get the feel of some 
cameras.  I wound up buying the Minolta Z1, surprisingly enough, 
because of how quickly it started up, focused, etc.  But now I'm 
thinking of returning it, for a couple of reasons (one being the lack 
of a flip-out LCD monitor for those over-the-head holds).

One thing that's concerned me about this camera is that when it's in 
full Auto mode, it seems to set the ISO rating to 200, and never 
seems to change that setting.  It plays with aperture and shutter 
speed to optimize the photo, but it doesn't seem to change the ISO. 
And the photos seem to be noisy (esp. w/ flash off) because of this 
higher ISO setting.  In order to switch the ISO, I have to go to "P" 
mode (program?) and manually set it.  So I'm wondering:  Is it common 
in most modern cameras that the fully "auto" mode fixes the ISO at 
200 and doesn't change it?  Do some allow you to set a different 
default ISO in Auto mode?  Or do some cameras even change the ISO on 
the fly?

Thanks!

  -- Tom