I use a Panasonic Lumix with 12x optical zoom, 10 megapixels (usually works out to about 5 megabytes). I think prices on these are down to well under $200. The camera lets me easily adjust for stronger light or dimmer light, though I still need that photo light set-up.

I usually use ONE of those daylight equivalent fluorescent bulbs. The plastic grocery bag wrapped around the front is pretty safe, because the bulb doesn't get hot. The bag diffuses the light, so I don't need to worry about hot spots or glare. I NEVER use the flash.

Two lamps with the bulbs gives more light, but I'm finding I like the shadows I get from one lamp--a little more dramatic.

I'll post some examples of pics taken without much consideration for exposure, etc. and what they look like after a minute of fiddling with the image in Windows Live Photo.