I've heard the term internal strobe being used, but I'm not quite sure what this is. Are they talking about the internal flash that's actually the camera's flash? Or is this something totally different?

That's it Shawn. This is vs. an external strobe that is used quite often in UW photography. A strobe is critical UW due to the lack of white light.

K, I wasn't sure if they were talking about buying the external flash adapter to attach to the camera. The housings for those are more expensive than for the camera itself.

I'm trying to figure out how to set something up to get more light on my olympus c-750/PT-018 setup. Right now all I have is the flash that's on the camera, which I'm worried won't work as well as I'd like. I've always heard mixed reviews about how it can put a glare in your pictures. I didn't have much problem with this before but most of my pics had that blue/green color to them instead of rich colors(snorkeling mind you). I even tried buying the underwater filter to see if that would help, but that just gave my pics a redish overtone. I've got the next 5 days off school so trying to get my bonaire stuff in order now while I have a break.

So to add an external you need an arm, external strobe, and some sort of setup to connect them correct?

Yes strobe, arm and sensor, and an external strobe for UW will cost as much or more than the camera and housing. It will only get you a little more range. My internal will get me to 3' while an external will only get you out to 4'. The best shots are much closer than that, less than a foot typical.

Snorkeling is always tough for photography, you do not get much time. You really want to shoot up at a subject and avoid shooting down.

A fairly cheap alternative is the Sunpac-G strobe/arm. It's not an Ikelite or Inon but at $200 for the strobe and arm it's worth looking at. It should work well with the C-750. I would consider making some form of internal flash deflector to help reduce backscatter. Adding an extender to the arm for positioning and to get the head farther from the camera would be a good idea. A cheap extention can be made from loc-line parts.
http://www.underwaterphotography.com/store/App/f.asp?P=18454

That one seems pretty value set, i'll definately think about that one for sure.

So if you get an external you block off the internal flash, but if you don't have one you want to use the internal on every shot pretty much? Sorry I'm such a noob ;)

Typically you do block the internal although some let some light out of it for fill.

Thanks!

I've got another noob question if you can answer it. There's some plastic piece on the outside called the diffuser/diffuser cover according to my manual. It doesn't say what they do or if i'm supposed to remove 1 or both. If I decide to just go internal flash do you typically remove that or do you keep that on? I'm trying to figure out what it does exactly but haven't found much.

Yes, unless you are in very shallow water 10ft or so, you will want the internal flash on and even in shallow water it will help light shadows and bring out more color. If you just use your internal flash, concentrate on pictures with as little distance between you and the subject as possible. Forget the wide angle reef shots (esp with the flash on) and try to shoot pictures where ALL of the picture is close. Macro shots can be done very nicely with the internal flash only and I often use both the internal and strobe on some macro shots I do.
I tried to look at the manual on line, figures it's would not load. If you are talking about the whitish plastic in front of the flash, you leave it in place. It softens the flash and helps reduce backscatter (looks like snow in your picture) somewhat. If you add an external strobe it is a good idea to then block off the internal flash but you still have to allow some of the light to be seen by the strobe as it uses this light to fire. Many of the less expensive strobes like the Sealifes use a deflector placed in front of the internal flash that block the light from going forward but at the same time directs some of the light upwards to the strobe to fire it. The Sunpak does not appear to come with one but it would be easy to make one out of plastic or aluminum. Others use a fiber optic cable to route light from your flash to the strobe. If you can find one of these it may be a better choice. Here is an example.It's a little more expensive but with the fiber cable may be a better choice.
http://www.performancegear.com/SL960D-external-flash.html