This is what I use:
Tripod
Nikon Coolpix S50C
Macro Mode (very important)
3 shop lamps with 100W bulbs with tissue paper covering
White paper for a background
Light placement is one overhead and two to each side slightly front
This is typically what the pictures look like after being corrected in photoshop using the automatic level, automatic color, and automatic contrast:
Cheers,
-Mike