Party suggestions
Some of these answers depend what zoom lens you're using. Phrasikleia is right, though, just zoom in or out until you like what you see in the viewfinder.
As for the flash, it depends on the quality of available light. If the light is good, go into P mode and keep the flash off. But if the light is bad...
1. Set the ISO as high as you can without causing really bad grain/noise. On my Rebel XT, I find 800 is acceptable, but 1600 is usually sloppy. So I'll avoid 1600 unless the light is REALLY bad.
2. Choose AV mode and set the widest aperture. Some lenses aren't sharp wide open, so I'll often use 3.5 or 4.0 on my 17-50mm lens, even though it goes to 2.8. With my lens, photos at 2.8 aren't quite as sharp as 4.0.
3. Start shooting, but take note of the shutter speeds the camera chooses. If you're getting 1/60 or faster, you're probably okay. But if people are moving around quickly or dancing, you might see motion blur. 1/125 or 1/200 will work better.
4. Look at a few pictures on the LCD screen, and zoom all the way in to check their quality and sharpness. If you're not getting a fast enough shutter speed, you'll need to either increase the sensitivity (ISO) or use flash.
5. I assume the only flash you have is the pop-up on camera. If you use flash, you might try lowering the flash exposure compensation to -2/3 or -1 stop. This will allow the flash to throw just a bit of light onto faces without making them look too bright. On-camera flash is not flattering light.
6. Another approach I sometimes take in dark settings is to set exposure compensation (not flash exposure, but overall exposure) to -1 or so. This makes the images look dark, but they *should* be dark -- it's a dark place! Without exposure compensation, the camera sets aperture and shutter assuming that the scene should have "normal" illumination -- in other words, it will make a dark scene look like it was average brightness. If you want dark to look dark, try some shots with negative EC and see if you like them.
Hope this helps. Also, don't forget to put the camera down and enjoy the party for a while.