Thanks so much LNDR. Your version is definitely much much better.
cheers - glad you thought so 
What do you mean by "artifacts?"
As Ellen pointed out there are artifacts caused by the jpeg compression. Artifacts are patterns, colours, or other things in the photo which were not real, but caused by the processing of the image. In this case I was meaning some of the colours and patterns, for example in the wrasses tail, where there are off colours, bright pixels, and blockiness. Playing with the saturation is an easy way to make this happen 
I definitely am not disappointed in it. That shot was taken in the UW Macro Scene mode with only the internal flash.
You shouldn't be disapointed!! You got a shot, and it shows a pretty neat behaviour 
It may help to understand your scene modes so you can anticipate the result. This scene mode has probably used a slow shutter speed, that is the shutter is open for a longer time to allow more ambient (sun) light in. This shutter speed doesn't at all affect the amount of light from of the flash because that happens really quickly. This ambient light underwater, as you know, has a lot of the red taken out and so your photos will have the cyan cast. If you didn't use the slow shutter speed you would get richer colours, but the background would be dark / black because there wouldn't be enought ambient light to light up the water column in the background.
HTH 
Leander