I picked up my home studio setup about 2 years ago... I did a ton of research, looking at speedlite setups, affordable starter studio packages, but I ended up getting a couple of PCB Einsteins, PLBs, and 24x30 softboxes... I'm still learning, but I've gotten some great shots of my son growing up (my wife has me do a shoot once a month for the past 2 years). The setup with 2 lights, modifiers, stands, wireless triggers, and background ended up being about $1500. The power I get from these studio stobes allow me to shoot with smaller apertures and get really tack sharp shots (I was amazed what I was getting from my 7D, and floored by the results from my 5DIII).
My one regret is when we go outdoors to shoot. I'm stuck with just my 580ex, and no modifiers (as its nearly impossible to lug all that lighting equipment outdoors, and manage a 22 month old kid. I'm now looking for a more portable outdoor setup...
I'm looking at the following:
YN622c - $85
(shooting outdoors with the 7D's built in flash trigger sort of works, but it's not 100% reliable)
43" Westscott Umbrella - $22
Cowboy Studio Umbrella Mount & Cold Shoe Mount - $20
Cowboy Studio Light Stand - $22
I'm getting this from Amazon so free shipping if i'm willing to wait 5-9 days (I live in Hawaii, and shipping is pretty killer).
The backdrop I have is also from Amazon, it's a ravelli backdrop and was ~$140, it came with 2 stands, the cross bar, black and white muslin and a couple clips and a carrying bag... I have a relatively small townhome, so the back drop helps screen household clutter, and since i don't have much room to work, I can't get too much distance between my subject and the background to black it out completely, so the black back drop helps.
5D MKIII|7D w/ Grip|EF-S 10-22MM f/3.5-4.5|EF-S 17-55MM f/2.8 IS|EF 24-105MM f/4L IS|EF 50MM f/1.4|EF 70-200MM f/2.8L IS|85mm f/1.8|35mm f/2 IS|70-300MM f/4-5.6 IS|580EX|Manfrotto 055PROB|2x PCB Einstein 640