canon flash gun and portraits

i was wondering if you think it is possible to acheive good portraits with a on camera flash gun or would i be better buying a lighting kit i.e interfit ex150.My budget is £200 so i could get a canon speedlite to go with my 350d or the interfit setup.I mainly do portraits in peoples homes and find some times there is not enough natural light.
any advice would be great !

Yes you can achieve good portraits with an flash gun but take it off the camera , bounce into an umbrella the set up is cheap $15 light stand, $6 or 7 for the accessories mount and $30 for a umbrella. $1.00 for a piece of white poster board for a fill card. This set-up doesn't always look pro but it will produce the same results