Sharp long range distance sensor gives weird readings

Hi
I am trying to use a sharp long range distance sensor (Sharp GP2Y0A02YK0F) and have googled a lot about it. I put a 47mf cap right on it, and that helps, but what happens is that I get essentially two ranges; if I move my hand from about 3 or 4 feet to 10" or so, it reads out from about 120 to 550, but as the distance goes further than 4ft, or if my hand slips just to the edge of its sensing path, the numbers jump up.
I'm using an led for a visual cue, mapping to convert the input from the Sharp (pin A0), to output 0 to 255 PWM on pin 9. The dimming and brightening led seems to mirror what I'm reading from the sensor.
Anyone know what's up?
Thanks, Dan

Have you read the datasheet of the sensor, It tells a lot about the behaviour and the sensitivity...