Do your portrait photo subjects look like a deer in headlights? I hate taking indoor pictures of family with my point-and-shoot pocket camera because the flash washes everything out. The most unflattering picture you can take of someone is with a flash pointed right in their face! This does NOT sit well with the wife!
The single biggest thing you can do to take amazing portraits is use an external flash which can be pointed at the ceiling or a wall. The light of the flash bounces off of the wall or ceiling and diffuses onto the subject.
I got a new Nikon D40x today along with a SB-400 external flash and a Nikon 18-200mm VR lens. A picture is worth a million words.
D40x with built-in flash pointed directly at subject.
D40x with SB400 flash pointed at wall.
D40x with SB400 pointed at wall and in Portrait Image Optimization mode.
You can see full-size photos here.
Nice with the Portrait Image Optimization. I will have to figure that out on the D80.
I like how soft it gets!