I think I’ve just found the perfect gift for Matt. I want to vomit every time I see one of his photos with that yellow tinge and I’m sure his colorblindness doesn’t help the situation any, but I think this will seal the deal. The Lumiquest Soft Screen is a cheapish diffuser for DSLRs with a pop-up flash. I need to get one for myself, too. It’s only £9.99, but you may be able to rig something up for a lot less.
Product Page [via Red Ferret]
Well, a diffuser will help with lighting and the harsh effects of direct flash, but for white balance it’s usefulness is really somewhat limited. It’s more important to just know how to set your white balance in your camera. As you mentioned though, you can make a diffuser for dirt cheap, but besides the one mentioned in this article, here are a couple links to some products and DIY diffusers worth checking out. :)
http://super.nova.org/DPR/DIY01/
http://store.garyfonginc.com/puf-01.html
http://store.garyfonginc.com/di.html