There's a lot you can do very cheaply. Obviously, I have a whole room in my house devoted to being a studio, complete with nice expensive lights, and a backdrop stand and all kinds of cool stuff like that, but before previously I was working with much more modest conditions.
Here are 10 things to get your started (on the cheap):
1) You don't need much space for portraits and macros. Obviously if you want to do full body glamour shots, you need more room, but for starters find a place in your house with a plain white wall, and just grab yourself a corner that you are going to use for photography.
2) Get some cheap backdrops. Professional backgrops are crazy expensive. But you don't really need to start there. There's a lot you can do just by grabbing some cheap fabric at your local fabric store. The superdark chiaroscuro background I use in tons of my shots is just 10 yards of heavy black felt attached by rings to my backdrop holder. For smaller portrait work, you can also try draping sheets or tablecloths over a clothes line, or even taping wrapping paper to the wall.
3) Lighting. The most important thing. Even more important than your camera is good lighting. The more the better. Before I started spending money on professional lights, I just used shop lights. You can get clamp on lights from Home Depot for like $10 a pop, and then just put 100 watt bulbs in them. Experiment with directing them in different ways. Often you don't want harsh light right on the subject, so maybe try bouncing light off the ceiling or reflecting it off an opposite wall. Also, for softer light try hanging a thin white sheet between the light and the subject to diffuse it. Be sure not to let the sheet touch the light or get too close because you don't want it to burn.
4) a Tripod. The more expensive your tripod, probably the more sturdy and stable it is, but you can start by just getting a cheap like one at Walmart or something. Probably about $20.
5) a camera. Probably the least important thing, but you still need it. Least important because it doesn't really matter what camera you get. Obviously, there's much more you can do with an expensive DSLR with good lenses, but given good lighting, and studio conditions, there's a lot you can do with even a cheap point-and-shoot.
6) the model. There are two ways you can do this. One, you can hire Carmen Electra and every portrait you take will come out looking gorgeous and like Carmen Electra. For most of of us this isn't an option. So we skip to two, friends. Find a friend or family member or someone who owes you money and make them sit for you. Self-portrait photography is always good too, and in fact has taught me a lot, but if there's anything that I've learned from my 365 days project, its that SP shooting is totally different from portrait shooting. There is no substitute for getting a real model to shoot and getting a feel for how things look under different lighting through the camera lens.
7) Make it fun and cozy. The biggest secret to successful portrait photography is making sure the model is having fun. If you're trying to do glamour treat the model like she's the most gorgeous woman on the planet. Make her fall in love with you. Make her want you to fall in love with her. That will come through in the shots. If you're trying to do some other emotion, create that emotion in the model. Have a conversation. Ask him/her to tell you a happy story if you want happiness or a sad story if you sadness. Maybe talk about his wife or her brother that passed away. Whatever you're going for. There is no substitute for real emotion. Most of all, the model needs to be comfortable. Ask ahead of time what kind of music they like and have a suitable CD on. Make sure they have plenty to drink. Water, wine, whatever. A good studio is a comfy studio.
8) Get a pony. Everyone likes ponies
9) Have some props. Again, if you aren't trying to build a full sized studio, you don't need a full sized prop room. But sometimes its nice to have a couple things laying around that might make for interesting pictures. Taking a picture of a baby? Maybe throw a teddy bear in there. Taking a picture of a musician? Give them a guitar to strum.
10) You. Make sure you're comfortable in there. Its not as important as the model being comfortable. But you need to feel at ease in order to get good pics too. Don't concern yourself so much with "how crappy my little corner of my living room that I take pictures in is." Concern yourself with having a good time taking photos. The less you worry about stuff, the better your pics are going to be.
Also, I finally put up a personal website a couple weeks ago at ChrisMaverick.com. So if people have always wanted to link to my a Mav website or wanted to comment on stuff, there it is. It has links to a lot of my photography and stuff like that.