Yongnuo YN-568EX is the best value for money ttl flash, performs brilliantly
I have a few YONGNUO flash units and they all perform flawlessly
defused off-camera flash is the best, but not always practical
although I have shot entire weddings that way, on camera is so much easier
basically if you are shooting on-camera you will want to bounce the light, either off the ceiling, wall or a large reflector
a plastic bag isn't going to help you much, neither will the bought diffusers for a pop-up flash
once u get a flash this will help a bit:
http://www.amazon.com/Opteka-Universal-Diffuser-Olympus-External/dp/B0017U0WM8/ref=sr_1_1?ie=UTF8&qid=1376201083&sr=8-1&keywords=flash+diffuser it collapses flat
but as said bouncing the light works better