I can not remember how many different diffusers I have had in last years. I even made my own DIY bounce card, gobos and snoots for my flashes
. But seriously, you can made a really decent DIY bounce card with just a bit of white and black foam, look here and make your own bounce card + BFT (Black Foamy Thing) device easily ->
At present, I have just a small bounce-card type diffuser, that I use only if I need a bit of fill and I don't have a wall or ceiling around.
As others have advised you can start by:
* visiting the Tangents Blog from Neil, where you can learn a lot about using your flash on camera.
* making your own diffuser (cheap), learning to use it, and getting an idea about how your pics look better with it
I think is really important to learn about how to light: direction of light, quality of light, how to mix ambient and flash light, etc. The Tangents site is a huge source of knowledge. With a solid knowledge about lighting and a little diffuser you can improve your photography a lot. Of course, learn to use your flash first, you have a great guide made by mcgregni.
Giving advice on a specific diffuser is complicated. We have several 'technologies', just to mention some:
* cap tipe. This is just a traslucent cap that you put on your flash and it spreads the light everywhere, so you get a softer result, but you need to have walls/ceilings. Maybe not so effective outside. Instead of a cap, you can find another shapes, like spheres (magsphere) or glass/bottle bottom. They create a bigger primary source of light, so can have an advantage outside compared with the cap.
* bounce card type. It's just the bouce card of your flash but on steroids, bigger, so you have a bigger source of light and softer results. They send the light preferably forward (so they don't need ceilings or walls), but they also can send part of the light to the ceiling, for a better result
* softbox type. It's a small softbox that can be square, round, oval... or even you can find diffusers that are softboxes but seem a bounce card, or even can be bended (like the flashbender ones). They don't need a wall or ceiling. Bigger the softbox, softer the light.
* mixed. There are so many manufacturers of diffusers that the list can be endless.
In general, flash diffusers are small, so if you are a bit far from your subject, you may not notice too much difference if you compare the results with the bare flash.
There are a lot of reviews comparing different flash diffusers over there, you can get an idea about what is better for you.
Regards.