The two handheld photos below, shot with a Canon 40D plus EF 70-200mm f/4L IS USM combination, illustrate the difference between turning the in-camera High ISO NR (noise reduction) OFF (the default value) and ON.
Personally, I find having the NR switched ON a huge plus as chroma (color) noise is reduced with no apparent damage to detail.
For shooting JPEG files, this is definitely my preferred setting. Lighting came from a single ceiling mounted daylight fluorescent tube.
The faint vertical pattern that you see on the white material on the back of the bookcase is due to the material itself — it’s a type of corrugated paper.
I think the 40D’s performance was flawless under this set of circumstances.
Click the images to view the full-sized, unedited version for your personal evaluation and printing.
Full size NR OFF, 1/25 sec, f/4, 70 mm
Full size NR ON, 1/30 sec, f/4, 70 mm