The other day I read a post on the Lenses Forum with instructions on flash settings. I humbly apoligise to the poster as I can not find the thread and give him (her) proper credit.
But, I tried the advice and it worked just great! Here are the recommended settings: set the camera mode to (M)anual, set ISO = 400, set f/stop = f/5.6, and set speed to 1/200th. Use the flash in the "ceiling bounce mode."
After expermenting Christmas Eve, I shot all my Christmas photos using these settings and got great results. Here is a sample of the wife and my grand daughter from my 17-55 EF-S IS using my 580EX SpeedLite.
Again, my thanks to the poster who put up these great instructions