Flash diffusers:
-- greaseproof paper from the kitchen*
-- a single 'ply' of toilet paper
-- bounce your flash off polystyrene sheet (I save the large pieces from packaging for that purpose), or hang a white bedsheet up.
-- Posh, large 'live' yoghurt pots have a cardboard outer over a thin white pot. Take the cardboard off, eat the yoghurt and use the white liner. They're ideal over flash heads, arranged so the bottom of the pot points toward the subject. The rhubarb ones are horrible, although this has nothing to do with photography really.
Generally, the bigger the area, the softer the light.
Backgrounds:
If it's small stuff, keep the background at least 75% of the distance to the camera away from the subject. That way it's well out of focus, so small blemishes, dust, etc. don't show up.
3-point lighting:
Soft lights at the side and onto the background, 'key' light about 45deg round from the front of the camera (higher than it, too). The key produces just enough shadow to give a 3D feeling; the soft lights stop the shadows getting too dark. Cheap 'slave' sensors for flashguns work very well (eBay), and you can tune the amount of light by altering the distances. You will need to use the hotshoe or sync socket on the camera, as built-in flashes often multi-flash - once or twice for focus and guessing exposure, then the main flash - this causes a false trigger for the slaves.
Camera settings:
Use a tripod. If you haven't got a cable release, use the self-timer.
Only stop down the lens to the minimum required to get all the subject in focus - backgrounds need to be blurred if possible. For smaller objects, f5.6-f8 is about as far as you should go - avoid anything near f22. If you can't reduce the sensitivity of the camera ("ASA" 100 or lower), you might need a neutral-density filter over the lens, otherwise double the distance of the flashguns (or diffusers) from the subject, to reduce the lighting (beware that this will make shadows sharper though).
Use the camera on manual settings. When you have something that works, make a note of the settings, and the distances involved for the lights (dramatically affects exposure), and camera-subject distance.
E.
Almost forgot: use a long-ish lens. For a DSLR with an APS sized sensor (most of 'em), I find about 150mm+ works. It lets you get the camera a reasonable distance away, and reduces the area of background in shot, which makes lighting easier. If it's really small stuff your macro lens may well be fine.
*if you are allowed any. Here it occasionally becomes 'too expensive' to allow me to use it!