The problem with the pop-up flash is that it's a small, directional point of light, aiming directly at the subject. This gives harsh shadows behind the subject and makes the photo generally unflattering.

There's a number of things that you can do to make this better:

1. Make the point of light larger. The professionals often use massive softboxes - large uniformly illuminated boxes of light which give very soft shadows which are very flattering. You can make your source of light slightly larger by buying or making a diffuser - something that sits in front of your flash and diffuses the small point into a larger point of light.
2. Bounce the flash off the ceiling. This is like turning the ceiling into a massive softbox. You can achieve this by putting a small piece of white card at a 45 degree angle in front of the flash. Experiment until you get the best results.
3. Use a longer exposure to balance the flash and the ambient light. Try putting the camera on a tripod or stable surface and allowing a long exposure as well as the flash. This is good for capturing a specific moment but allowing the background light to fill in the dark shadows that you would get otherwise. This is often set up as an automatic scene mode called "Night Portrait" or something similar.