lord have mercy 50% of the last couple of hundred pictures I took had red eye. I am using a Sony digital camera inside with the lights on in the house.
I know how to edit the red eye out but what should I do differently to minimize ever seeing it in the first place?
Red eye is caused by light reflecting off the back of the eye. Red eye reduction systems work by having the flash fire a couple of times so that the iris stops down and reduces the amount of light getting in and out.
You could try checking whether your camera has red eye reduction and that it's switched on. Failing that, I'd look at the possibility of using an external flash gun which you can aim at a reflective surface (usualy the ceiling) and / or use with a diffuser to give a softer flash.
Further Ian's point, the main reason you see red-eye is because the room was dark or dimly lit (meaning everyone's irises are wide open) and the sudden bright light shows you the back of the eyeball. That's why you never see red-eye on a picture taken during a sunny day.
Red-eye reduction works by sending out a flash so that everyone's irises close down before the actual flash/shot occurs.
Best solution is to make sure the room is well lit before you snap any photos.
I've just tried experimenting with a simple point & shoot digital camera, a sheet of grease proof paper and a roll of masking tape. The idea was to put a bit of paper in front of the flash, angled upwards so that some of the flash would be reflected up and some diffused forward. I spent about 30 seconds on that part, so as you can imagine it was a piece of high precision engineering. I then took some pictures of #2 son staring at the camera at about 6'. After removing the paper I took some more pictures. The pictures with the greaseproof paper had less red eye, and gentler shadows with more detail in them.