In conventional photography, one thing that can help a lot is using indirect light rather than a direct flash. Unfortunately, many digital cameras don't provide any means for synchronizing a remote flash so you're stuck with what they provide.
One thing I'd really like to see would be a camera with two flashes on opposite sides of the lens. Moving the flash away from the lens can very effectively reduce red-eye, as well as adding some 'depth' to the subject, but can cause very ugly shadows if the background is moderately reflective but is not illuminated. I would think adding a small secondary flash on the opposite side of the lens could fill in the shadows without flattening things too much.