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2. Two or three worklights with 100 W bulbs (can be found at a hardware store for under $10 each)
3. A translucent plastic storage box to set up as a "stage", in which the object is placed on a display stand or jewelry bust4. Several pieces of silky cloth as backdrops
You do not need to get a top-of-the-line digital camera with 5 Megapixels or more, but the camera should have a macro setting and should let you adjust the white balance to compensate for different lighting condition. Recharagable batteries are a must, as digital cameras go through batteries quickly, and you could easily spend a lot of money on batteries otherwise.
The plastic box setup, with two worklights shining through the sides provides soft shadows, and you can use an extra worklight from the front or top when needed. Do not use your camera's flash (it tends to make small objects appear flat), and set the white balance to the type of lighting you are using (see your camera's manual). Some cloth (particularly the kind used for linings) in a nice neutral color (grey, light blue, etc.) makes for an attractive background.