Try zooming in, and standing further away from the object you're photographing. This will reduce the intensity of the flash, and often it will reduce the aperture of the camera (automatically, not something you need to worry about). Both of these combined will prevent whiteout.
I used to do that a lot with my Canon Powershot S40 (which took most of the pix I've posted here on CPF). I found out by zooming out to maximum, taking a couple of steps back, the flash would be weakened sufficiently so as not to overexpose the image.
Also, if the light reflects off a flat surface directly back into the camera, even the matte black of the the Surefire U2's side panels like the one in my avatar, it will white out. Change the angle of the light or your camera and that might help.
Some cameras have the ability to reduce flash power, it's usually a menu option called Flash Exposure Compensation (FEC) or something similar. Knock it down to -1 or -2 and experiment, different settings work for different cameras and situations. Don't forget to reset it to 0 after you're done! Also, if you're in a situation where you need more power, +1 or +2 can help.
Finally, if all else fails, go out and buy a digital SLR with automatic variable-power flash control. I had NO idea they had this amazing feature until I bought one - and suddenly, I didn't need to resort to ANY of the above tricks! It turns out that my onboard flash fires a very weak preflash, the camera meters the returned light and automatically adjusts the power of the main flash. This is fired so fast that even I didn't realize there were actually two flashes going off (preflash, main flash). But suddenly all the lights look better, I wonder why! /ubbthreads/images/graemlins/grin.gif