The internal flash works fine just use the diffuser, all zoom cameras with this long port have the the same issues, the A640 is no different, Canon did a great job in correcting this.
The pictures were taken with an internal flash only, the second come out fine with a diffuser.
OH Okay, that clears it up and makes me feel a little better! I just got so frustrated with the failing 95 I didn't want to start anew only to be frustrated for a different reason