When I have my flash on E-TTL...how is that different then on M?
In manual, the flash fires with a preset power level. At full power, it's 1/1. At 1/2, it's half of full power. At 1/8 it's three stops below full power...and so on. The flash does not communicate with the camera for metering...only when to fire.
When in E-TTL mode, you have 'Through The Lens' metering. Canon's method of flash metering is to fire a pre-flash just before the shutter opens. The camera then reads the reflected light coming into the lens. It uses that information to decide how much power the flash should use. Then when the shutter opens, it fires the flash again, this time it's for real.
This all happens very fast....you probably wouldn't even notice it.
When in E-TTL....you can adjust the FEC (flash exposure compensation)...and you can adjust it in 1\3 increments. What this does, is change the flash's power away from it's base reading. So if you set it to +1, it would add one full stop of light to it's reading before firing the flash the 2nd time. For one shot, it might be firing full power, the next time it might be a lot less...but it will still add one stop over what it meters...which is, of course, dependant on what it's reflecting off of.
E-TTL is great for something like a wedding, where the lighting and situation will change from shot to shot. With studio work, manual flash is just fine because the lighting & subject aren't changing for every shot.
Take note that the camera & flash must be in communication for E-TTL to work. So the flash must be on the camera or attached via the Canon off shoe cord. You can use E-TTL wirelessly, but you need both a master unit and a slave unit. A Master can be a 580/550EX flash or the ST-E2. A slave could be a 580/550EX or a 430/420EX. You could even add more slaves to the mix and fire several flashes...while still utilizing E-TTL metering. That being said, most photographers prefer to use manual flash control when there are multiples involved (or even with just one, off-camera unit)...the reason being is that manual flash is predictable while E-TTL is dependant on the reflectivity of the scene and Canon's metering algorithms. (in can sometimes give unpredictable results).