There is no better lighting than natural light.  If you stay out of direct sunlight you are rewarded with the warmest, softest light that wraps around you subject in the most pleasing way.  Here are two quick portraits I shot the other day using nothing but diffuse sunlight coming in through a window:

1/320 second @ f/2.2, ISO 200, focal length 50mm

1/160 second @ f/2.8, ISO 200, focal length 50mm

1/6 second @ f/4.0, ISO 200, focal length 82mm

This shot was taken in my bathroom using nothing but two florescent bulbs.  I was trying out the low-light capabilities of my new 24-105mm f/4 L IS.  Result?  A super-sharp image, hand held, at 1/6 second.  This is an awesome lens.

And yes, I smirk when I shoot.