As one progresses into a competent photographer, it seems that lighting is one of the most important factors to getting a great shot. At least this is my guess; if you’re an actual competent photographer, feel free to chime in via the comments.
I’d never really thought much about it, but a camera’s flash can change an image’s color if it’s too harsh. This can be illustrated by the difference between the first photo on this page, and the diffused image below this paragraph.
Both of these photos were taken with the Canon T2i’s built-in flash, and I simply held up a piece of paper in front of the light on the first photo. This “paper light diffuser” used is shown below, as well as another photo on the non-flash automatic mode.
Certainly photography is about the kind of effect that you want to put off, and considering the price (a piece of paper), this is definitely something to try if you’re a photographer on a budget.
As mentioned on Steve’s Digicams, you can also attach a piece of tissue paper to your flash for a similar effect. Although I haven’t tried it, one should be able to use this with a point-and-shoot camera (maybe using CHDK?) or even a flash-enabled smartphone. The shots on this page were taken with a Canon T2i DSLR.
If you’d like something a little better than a piece of paper or tissue, this diffuser is less than $10 from Amazon, although it will obviously take up room in your bag. It doesn’t look like it will work with the built in flash on most cameras, so an external flash like this one would be needed.