If the images are in RAW then don't worry you can sort out the WB later. If they look orange on the camera check what you WB is set to. If it's auto go to daylight or similar. The surroundings may be confusing the cameras evaluation of the light quality.
You're going to run into difficulties if you try to mix direct, uncorrected flash light with ambient tungsten lighting. Even shooting raw, you cannot simultaneously choose a WB that will be correct for flash (~5600K) and tungsten (~3000k). I know. I've done it. It's a mistake. You get a nice warm background and a cold blue subject. If you correct one then the other turns to cack.
If you want to make things look right, colourwise, you will have to shoot with....
- ambient light only;
- direct flash as the dominant light source, leading to a dim abyss in the background;
- find a way to colour balance the flash, either with a CTO (colour temperature orange) gel or by bouncing off a warm toned surface - woodwork, perhaps.
Even just bouncing off anything (neutral white/grey) will at least allow the flash to illuminate the surroundings, thus reducing the temperature gap between the surroundings and the flash.
The right option really depends on your own goals for the image. Some people are OK with dark backgrounds and brightly lit subjects. If you want really good results then, personally, I'd forget the popup and shoot without flash if at all possible. You can get some pretty fine results at 1600 ISO from the 40D. Otherwise, swallow the cost to get a flash gun that will tilt and swivel.
However, I should hope that with the f/1.8 (or let's say f/2.0, to sharpen it a tad) from the nifty, plus a willing accomplice who is happy to remain still, plus a lowish shutter speed - e.g. 1/60 - and a suitable ISO you should hopefully be able to get what you need without flash. What you could try is to use the popup, but dial it back to -2 FEC so that it only provides a small catchlight in the eyes and the lightest fill to any shadows in the eye sockets, without creating a nasty imbalance of colour temperatures.
Here's an example at 1600 ISO taken with my 30D at f/2.8 and 1/60, to suck in some ambient light, and bounced flash (with a catchlight card) from my 580EX to given some sparkle to my subject. This was shot in raw and the only adjustments were to warm it up a fraction by adding 100K to the temperature, boost exposure by 0.2 stops and brighten the blacks/shadows a fraction. This has had no attempt at noise reduction during editing.
By the way, I made more than my fair share of mistakes when shooting with flash in my early days, and still do. Here's a thread I started when I made an atrocious job of shooting a wedding (for a friend) with only a 30D, 17-85 lens and 580EX flash -
http://photography-on-the.net/forum/showthread.php?t=286091. Key lessons learned were....
- Set exposure manually for the ambient light to control how little or how much it contributes to the scene;
- If you mix high colour temperature from the flash with low colour temperature from tungsten then your shots will look like poo. A CTO gel will help no end (or whatever colour gel you need to match the flash to the ambient conditions);
- A slow lens is severely limiting. You don't want to set your ISO higher than you need, yet you must keep your shutter speed up and the only way to do that indoors is to hammer the scene with flash or use fast glass. f/2.8 is the minimum for wedding type shooting. f/1.8 or faster will often be better. In any case, a wide aperture lens is generally preferred for portraiture.
For more on flash techniques and how to balance ambient and flash illumination, check out this website -
http://planetneil.com/tangents/. It is very good!
See how he balances ambient and flash by "dragging the shutter", also known as slow sync flash.
You could always try to fashion your own diffuser/bouncer to see whether you can make magic from your popup. Take a look at this -
http://www.adidap.com/index.php/2007/12/20/diy-poors-man-ring-flash/.
And I dont want that to happen' this time
