Flash Washes Out Subject

It's just too bright! You can darken the effect of a flash by moving farther away from your subject and using the zoom to compensate for the increased distance.

Another thing to try is to get your subjects to line up about the same distance from the camera so the guy in the front row doesn't get all the flash for himself. You can even go so far as to relegate people in white shirts farther to the back.

Also, consider what is called a "diffuser". Technically this is an overpriced filter of sorts that sits over the flash and diffuses the light. This darkens and softens it, often leading to a nicer picture. (The effective range of the flash is also reduced.)

The good news is you can make a diffuser out of just about anything white. The flash is piercing, so you'll get different levels of effect if you try to shoot the flash through a piece of paper, a white T-shirt, a cottonball, or a couple squares of toilet paper.

If you have the means (namely if you have a camera with a hot shoe), you might also consider an offset flash. This is a flash that sits to the side of the camera instead of pointing right at the subject. The advantage here is that you can cause some of the person's face to be in shadow, giving it a feeling of a little more depth.

Or, if you have a flash that can be redirected, you can point it at the ceiling and have the light bounce from there down onto your subject. It will look a lot better than the head-on flash.