Natural lighting tends to be the most flattering type of photography lighting, because this is how we see things in our everyday life. Natural lighting is mostly used to catch candid moments and used for a personal feel, be it indoor lighting or sunshine. Some uses of natural light include window lighting, where the natural sunlight is projected through a window. The glass diffuses the sunlight and creates a calm mood for the pictures.
Although using natural light is preferred, sometimes a flash fill in is needed. When the weather doesn't permit the use of natural light, or when the sunlight is direct, the flash helps stave off shadows and hard lines on the subject. It also makes the direct light appear as though it's behind the subject.
Direct flash tends to wash out colors and bring out blemishes in the subject. One method of using flash and speed lighting is to bounce the flash instead of pointing it directly at the subject. Flash lighting is used specifically indoors, where natural light is usually unavailable. Photographers should be cautious, however, due to the fact that flash lighting can give off too much light, leading to a harshly bright look. This is where a photography lighting device called a softbox is useful. Using a softbox calms the harshness of the flash as it diffuses the light and causes it to "bounce" off other surfaces--such as a photography umbrella--and fall on the subject with a soft glow.
Ambient lighting is man-made, soft lighting in the background or around the subject. Ambient light is soft, and used to create a softening affect. With digital photography, ambient lighting tends to cast a yellow or red hue on the subject, usually easy to correct if you switch the manual white balance and adjust on the fly. You can also use a bounce flash to highlight your subject without whitening your light.
Placement of the lighting will also affect the photography. You can use the position of the sun to highlight your subjects or use man-made light at different angles to create the shot you want. Direct light should always be avoided, because it causes hardness in the subject, as well as strange shadowing. This can be corrected with fill flash when necessary.