All images were taken with a Nikon Coolpix L4 (in fact, the same camera we gave away in a previous contest here). The Nikon is a low to medium range digital camera and can probably be found for around $100. I choose to use it to demonstrate the quality of pictures possible with an affordable camera using my setup.
Undoubtedly, the pictures could have been better through the use of different equipment, different lights, or a more experienced photographer -- consider this an introduction for you to improve on.
Step 1: Motivation, parts, and estimated cost
scrap wood from a dumpster - free
12 x 24 inch light tent - $35 or make your own bigger, better, and cheaper one here or here.
tripod - $30
5 clamp-on lights - $6 each at Home Depot, but you know you've got at least two sitting around somewhere
5 compact fluorescent light bulbs (CFL) - $10+ depending on rebates, energy star discounts, and whatever governmental price discounts are available. I've paid as low as $1 per CFL at times!
extension cords - $5
Including my purchased tripod and light tent, I spent around $100 in addition to the camera for this setup. If you built your own light tent and used a bunch of milkcrates and chairs as a tripod, this could easily be a $25 project consisting of a few new lamps and CFLs.