A better flash would be a great investment. The built-in flash is not very powerful and it's awfully close to the lens axis...which means that subjects will look flat and often have red eyes.
An accessory flash will sit up on the hot shoe, higher above the lens. The further away you can move the flash, the better the lighting will look. You can also get a bounce & swivel unit that will allow you to bounce the flash for even better results.
You can look at flash units like the Canon 550 EX or the 580 EX, those are op of the line. There is a 440 or 420 that is less expensive but has less options. You could even get a regular automatic flash unit, it will work but won't use the camera's fancy metering like a Canon Unit will. Just make sure that any flash you get is compatible with your camera. Some units have a high trigger voltage that might fry your camera.