Lighting is provided by a desk lamp from Wilkinsons reflected off the white side of an A3 piece of art board, with a peice of A4 paper folded in half on the other side to provide fill.
The background is another piece of card, and the figure is stood on a piece of black card.
I used two different cameras for this test, a Fuji s602z (a 3mp model from 2002) and a more recent Canon Powershot G9 (10mp, 2007).
Both cameras where tripod mounted.
Set-up Shot

Shot from the s602 and desklamp (left), and Canon G9 with flash (right)


Not bad for an eight year old camera. Proof that you don't need loads of expensive equipment to take decent photos.
More photos here