Most digicams has 2 issues with flash: red eye and random blurred white dots (induced by dust in the air). The redeye problem is consequence of the very short distance between the flash and the lens. As the flash light reflected by the back of the eye is almost in the same line than the lens, all that light is captured by it and that generates the red eye effect. The only "safe" pictures are those taken very close to the subject (1-1,5 meters) because the angle formed between the lens, the flash and the eye increases, and the redeye dissapears. I'd red eye problems in almost all my pictures (except for the short distance ones), and I'd to correct it in PS. If your pictures look overexposed, use FEC (flash exposure compensation) in Creative modes (P for example) and set it to -1/3 to -2/3.
To take good night shots, the flash is useless (except for very close subjects). You must use a tripod and long exposures (in Tv mode), and use only the available light. Do not increase ISO except it's absolutely needed, because it increases noise.
Also I think the "flash" WB is too yellow (I don't know why Canon chooses such a yellow setting), so I use "Daylight" WB when shooting with flash.
Another problem can happen when you shoot the main subject using flash, but also use a slow shutter speed to keep the background well exposed with the available light. In that case, different sections of the picture have different color temperatures, so no "global" WB is right for the whole scene. In that case they are 2 solutions: shoot 2 pictures (one with daylight WB for the flash exposed part, and another with custom WB or with the preset one corresponding to the available light (tungsten or fluorescent), using tripod, or shoot in RAW and generate 2 TIFF from it, one with every WB, and then recombine the 2 images using the areas with the right WB.