You need to hit the flash button. There are upsides and downsides to this. Think of the times your phone's camera flashed when you tried to take a stealthy shot but had it on auto. It also lets you have slightly better separation from the focal plane in a compact camera. Not much, but a little, especially with a diffuser.
It's manual. I consider the built in flash basically an emergency to limited fill flash option. I'd have been just as happy with the camera if they'd simply left it off. Really need flash attachment with this camera for any serious flash work. The built in is for point and shoot convenience only.
Manually hit the flash button. Some of the flash functions change with the different shooting settings (PAS). i thought initially it would pop up automatically but haven't found this to be the case with the later software versions.
I just came back from Europe and actually never used the flash, I was under the assumption it was slaved to trigger but Looking at the flash manual, it looks like Sony built the unit without the ability to be optically slaved. It is radio control (a very nice feature to have), but that means that the camera that you are using has to have a built-in compatable radio transmitter in the camera for it to work. It looks like the NEX does not have this feature.