Put the camera onto apperture priority ('A' mode) and set it to the minimum apperture (F5.6 probably, if you're zoomed in)
That will give you the maximum shutter speed and lowest apperture, giving you minimal depth of field. i.e. keeping the subject in focus and blurring the background.
Zoom in as far as you can. It will give a nice "squeezed" perspective and will generally create a nice portrait, aswell as cut down on depth of field.
A few things you can try is tricking the white balance. You can trick the white balance to either cool or warm the pictures colours. This done correctly, can look quite nice. (You can make a pretty grey day look like it's nice and warm) This can be done in the cameras menu.
You can also use flash quite effectively even out doors. If you set the flash's power quite low, you can remove some of the imperfections on peoples faces. And if it's a warm day, set the white balance to 'flash', and it will make the background all warm, and the subject more 'neutral' making them stand out a bit more. You often see that effect applied in fashion photography.
The flash's power can also be set in the menu. But be carefull, you would be suprised how powerfull the flash is even outdoors in bright sunlight.
But don't go mad with the flash... it removes a lot of the shadows, and shadows give pictures their depth.
As far as composition goes, get in close. Generally speaking, poor portraits contain about 75% kitchen wall, and 25% subject. i.e. they were not zoomed in enough, or weren't close enough. You want the audience to be more 'involved' with the subject.