I'm no expert with the camera, but I've been playing around a bit lately and discovered that a steady hand and natural light are SOOOOO much better for cakes than a flash!
The photo on the left was taken using the flash. The one on the right is the same cake, taken without the flash (but with VERY steady hands!!!) I used the basic auto settings on my digital camera for both (except I used the macro setting) and I have not altered these photos (except a little cropping!)
Note the beautiful translucence of the fondant on the right... that's gone on the left. In its place, you see all the flaws by the harsher light of the flash!
The colours on the right are much closer to reality than those on the left. Also, take a look at the cake plate... that's Mikasa cut crystal... looks pretty blah on the left, but look at it sparkle on the right!
One thing the flash photography does have going for it is that the shimmer from the pearl dust I used is much more visible on the left. On the right, it doesn't show at all on the ribbon roses or the swags. Granted, there wasn't much there so it was subtle, but it doesn't show up at all on the right.