You have to think about why you want to use manual flash. There seems almost snobbery from some people about the benefits of manual exposure mode and manual flash. Using them won't inherently take better pictures - if automatic settings come up with the same results, you'll get an identical image. I believe you're best off understanding your camera and flash's automation, and how to make them work for you - you haven't always got the time to fiddle around with manual settings.
However, there are times when manual settings are of great use - such as when you need reproducible results, when you need complete control over the image, or when the automation won't behave itself properly.
E-TTL does work pretty well (though I confess it does seem more consistent with my Qflash than my 580EX). It can help to set E-TTL to average rather than evaluative when using the flash indoors for the majority or all of the light, rather than for fill. This is a custom function on your camera (C.Fn 14 on my 20D). Don't forget to set back to evaluative when you're done, otherwise you'll likely get significantly overflashed outdoor shots when you're using the flash for fill.
E-TTL does need a bit of help with positive FEC at times, too - it does have something of a tendency to underexpose. This is particularly noticeable in E-TTL evaluative; the algorithm is heavily weighted to avoid any bright areas blowing out, so something reflective or white can lead to underexposure of the flash.
With those understandings in mind, I find that I can almost always make E-TTL work for me.
Zoom sets the zoom setting on the flash's head, and hence the coverage of the flash, which is sometimes expressed as a beam angle (whilst it's not precisely what you get, think of it as the angle at the top of a cone of light extending from the flash's bulb). You can take manual control of zoom even in E-TTL mode.
By default, the flash will auto-zoom (according to the focal length of the lens and the crop factor of the camera) if the head of the flash is in the straight ahead position and you're in OFF mode (that is, not MASTER for wireless E-TTL control).
If you tilt the head to another position with the zoom set to auto, the flash adopts a compromise 50mm position - the display shows -- mm. That's wide enough to fill my Lumiquest Promax System's 80/20 pretty effectively, though it's arguably better to zoom the head out further.
The widest zoom setting - 14mm - requires you to pull out the wide panel.
Normally, if you're bouncing, you want to zoom the flash head to a wide position. This leads to a less concentrated beam and hence a pretty low guide number. The more zoomed in the head is, the more powerful the flash's beam, but the less area is covered.
To use manual power, zoom the flash to get the coverage you need. Adjust the power to get the desired effect. Shoot. 1/2 is half the power of 1/1, 1/4 is a quarter the power, and so on.
Without a flash meter, the only way to work systematically is with the guide number. There's a table in the back of the flash's manual which gives the guide number for each zoom setting at 1/1. At 1/2, the guide number will be 1.41 times less (square root of 2) - that's half the power. 1/4 is a quarter power and so on.
Guide number is simply distance between flash and subject multiplied by f/stop; the figures are quoted for ISO 100. For example, a guide number of 58 (full power at 105mm zoom) is 10.4 metres at f/5.6 or 5.3 metres at f/11. Note that two stops decrease in aperture halves the distance. If you go up a full ISO, multiply the guide number by 1.41 (the square root of 2 again). At ISO 400, you should be doubling the guide number and so on.
Often the easiest thing when using manual flash with digital in the absence of a flash meter is simply to use the histogram to get the power correct.
As an aside, I did a mathematical comparison of my Qflash and my 580EX, and the quoted guide number 58 of the 580EX was at the 105mm zoom position, which is roughly a 23 degree beam angle. That's pretty similar to the incredibly efficient Qflash telephoto / portrait reflector (which I don't own, but which would give an approximately 20 degree beam with a guide number of 101 on my 200Ws Qflash X5d-R setup - nearly four times more powerful).
By way of comparison, at the 24mm position, the GN of a 580EX is 28 - which is roughly a 75 degree beam angle. (The 200Ws Qflash X5d-R equivalent is the diffuser for a 70 degree beam angle - also a GN of 28 - but that's very diffuse already, whereas I'd typically be using the Lumiquest Promax System with the white insert, which is a 1 1/3 stop loss).