help with photography and camera

[ahs23]

hi i recently purchased the olympus 590 uz. well frankly, i am quite disappointed with it. it may be because i dont know how to adjust it but the auto is really bad.
the main problem is that whenever i take a picture with flash it blows everything to white, i mean while taking pictures indoors where there is yellow light and it seems for a very good opturtunity to take a picture , the picture becomes dull and the colours become soft and really lose their richness and the yellow light is converted to white on the subject and the remaining background becomes dark.
i read a few reviews about the white balance performance of the 590 uz and they say that its not that good. any how please tell me if there are any incadescent type of flash that keep the colours intact when taking a picture. if there are any such flas when and why are they used.

lastly i am really disappointed with my camera and i am thinking of changing it. i dont understand whether i should step down to the sony h 20 which has a lot of good reviews or should i step upto the olympus e620.
i would like a camera with good functions but it should be able to produce perfect images in the place where i use it the most that is indoor family functions and gatherings at home and places like a restaurant. please guide me.

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