Here's a quick product photography and lighting tutorial, I'll keep it simple and low cost.
UPDATE: I have grown a lot as a photographer since writing this, so I will post a 'part 2' soon.
Use a camera with manual controls over the camera's settings, if you need to buy one, have a look at something like a canon G8 / G9 etc.. they are great for the price. If you can afford it, then any DSLR camera will be the best. Canon, Nikon, Sony, Panasonic and Olympus are recommended, I avoid many other brands. Buy second hand if needed.
Use a tripod if you're getting shaky images. ANY tripod will do if it can hold your camera.
If you cannot 'zoom in' close enough to your items then get a macro lens adapter to fit your camera. For cameras with a thread on the front of the lens, use a set of 3 macro filters (with the same 'mm' size to fit your lens), or if you're using a camera with a detachable lens and need to get really close (for tiny items) get a reverse macro adapter (to fit the 'mm' of your lens and your camera's mount).
Use lots of light. Any kind of light will do, if you want to invest in some flashes, 1-3 of these CF-18 flashes will probably be great (they shoot when your camera's flash goes off, so no need for cables.) Get yourself some mini tripods to hold up your lights and these 'soft boxes' to give you nicer light on your photos. These LED lights are also good if for some reason you cannot use the flashes, they won't be as bright as the flashes but they are an alternative.
Remember to set the 'White Balance' (WB) on your camera to a setting to match the lights you are using. If your image looks yellowish, blueish, greenish or purplish then you have the white balance on the wrong setting.
Use a good background. The cheapest is a big piece of white or black paper, and this is actually the choice for many professional photographers. Get smooth paper if you can. Set the paper up on a table with half of the paper lifted up in an "L" shape to give yourself a good background. You can also get a big cardboard box and spray paint the inside white (or glue white paper inside it), this will give you great results!
Edit your photos. The best free software is "G.I.M.P." but it is very advanced. Paint.net is good too, and is simpler. With either program, go to 'brightness/contrast' and increase the contrast and as much as you can without loosing too much detail in your product. Adjust the brightness as needed. You can now use a paintbrush to paint over any problems in your background (There are better tools for this, such as the 'healing brush' or 'clone stamp' but they are more complicated). This is not always enough to get a perfect image but it's a good quick fix.
Remember that dark items will be easier to photograph on white, and brightly colored items will be much easier to photograph on a black background. Taking the time to learn your camera will make a huge difference, look your camera up on Youtube, or just read the manual. Have fun.