You might hate flash because you've only experienced onboard flashes for point-and-shoot cameras. Many dedicated / external flashes, as mentioned, can direct their light upward and/or backwards, allowing the flash to light the subject indirectly. This results in much better lighting. Google for "flash direct indirect" or something like that. If you don't want to sink money into a flash ($200+ for a modern one with tilt/swivel), Google for "diy flash diffuser" or you can buy something like a
Light Scoop. For a couple of months, I held an index card in front of my onboard flash when I needed it
Much better results that way.
I might have been unorthodox, but when I started on SLR photography about a year ago, my SIL directed me to buy a body-only and a 50mm lens. I do not regret this, as I found the 50 nicely handled my needs, which was mostly taking pictures of my daughter who was born in 2009 (my parents subsidized the purchase after seeing pics from SIL's K10D). 50 mm lens lets you take good portrait-ish shots without getting too close, but not having to be too far from the action. It's a bit too narrow for tight spaces though.
If you're going to be saving for a good lens, I would suggest something in the "normal range," which is something between, say, 35mm and 70 mm. The FA 50 mm f/1.4 is fairly popular and relatively cheap (I think around $300 these days). I'd definitely go with a 50 mm for the versatility. If you're really set on doing manual focus, you can find manual focus 50mm's for cheaper. Eventually you will figure out your real needs and interests. I got a wider lens recently (35 mm) because I found that I was wanting a wider field of view, especially while indoors.