Am I better buying a flash or a flash diffuser?

Well, the flash diffusers are a lot cheaper, and as I already have a built in flash on my camera, it would be a lot cheaper. Or, would I just be as well saving up for a flash for my horseshoe? Thanks.
Ohh, I have a Nikon D60, if that helps: L

First… It's "HOT shoe" not horseshoe ;-)

The pop-up flash on your camera is severely limited in what it can do. It is only good for about 12-14', where a good hot shoe flash can throw light 75'+, has adjustable light output, is directional so that you can bounce the light off of walls/ceilings, and if you add a flash trigger… It can be used off camera. BUT… I still use a diffuser on my hot shoe flashes (I prefer the Gary Fong LightSphere II)

Do you need a lot of flash in your shooting? An external flash for the hotshoe will certainly help ease the camera's battery and provide more powerful lighting. If you only use the flash occasionally, the diffuser will do. You can survive even without the diffuser if you use the flash rarely.