Most if not all digital cameras these days use a preflash of some sort. It's extremely quick, and most people won't notice. They do this to evaluate the exposure of the scene, so as to be able to expose it properly. This means that a cheap external flash is never going to be able to just Do The Right Thing without commuinicating with the camera.

With an external flash which can ignore the preflash, you're going to have to put the camera in full manual mode, and then either use a light meeter or use trial and error to get the proper flash exposure. Not great for candids, but if you're staying in one place it's doable.

To really improve indoor shots you're going to want to get some sort of bounce option so that the light isn't coming directly from the camera for that "deer in the headlights" look.

Matthew