If your camera has a small enough flash, a simple solution is a white/translucent film canister. For larger flashes, I've seen people use rubbing alcohol bottles.
Simply hold the canister up to your flash, trace the shape with a fine point sharpie onto the canister, use an exacto knife to cut out a hole snug enough to just slide over your flash; this plastic was thin and easy to cut.
This amount of diffusion may be fine for some situations, but I found that there was still too much contrast & glare, so I tried adding a sheet or two of plain printer paper inside the canister -- just enough to cover the inside surface, but not over the cut hole.
Then I tested the camera without the diffuser, with it & with one and two pieces of paper inside:
I did have some ambient natural light, but very little since it's a cloudy day (go figure), and no artificial light. I think I'd be fine using just one piece of paper, and it'll probably depend on whatever the lighting conditions are -- but I think it's a nice little trick for basic shooting needs. Plus the pop-off lid makes it really easy to change how much paper is in the canister ;)
Unfortunately for the event I shot (Seattle's Etsy Craft Party), I hadn't yet discovered the paper trick, and shot with just the canister - so I ended up with more glare & harsh shadows than I wanted, but it turned out okay, especially with some photoshop tweaking... here's a shot from the night featuring artwork by Zoe Williams:
see the rest of the photos here