<p>With that much of a budget you'd probably be best served checking out the Strobist site, and see if working with speedlights will do what you need. Luckily with that small a workspace (4x4') speedlights should be doable. I'd go for 2 Yongnuo flashes (I've purchased them as low as $20 in excellent condition on ebay before) and 2 of the cheapie umbrella softboxes (~2x3'). Add a pair of cheap chinese radio triggers and 2 stands, umbrella brackets, and cheap sandbags and you're probably all in for about $150 on the low end, to about $300 if you can't find any deals.<br>
<br />You want the softboxes because you wanted a larger, diffused light source to eliminate the "hard shadows". Another option would be to get a large scrim, or make one from nylon ripstop fabric at the local craft store. fire your lights through that to diffuse the light more. There's probably a dozen ways to do this, and you're probably get as many suggestions here lol, so I'd start by checking the strobist site first for tutorials. They're pretty good for working on a budget. <br /><br />The one thing I would not recommend: don't buy one of those cheapie lighting "kits" from amazon, ebay, etc that seem too good to be true (ie. 3 lights, stands, umbrellas, carrying case for $200). They're usually crap, and if they don't break within a month you'll likely be disappointed in their overall quality, consistency, or usability.</p>