One of the areas that seems to cause huge issues for new etsy and online sellers in general is pictures. I wanted to show you my very simple lighting setup. In the top picture there are 4 pieces of white cardboard - 3 of them taped together to form the backing and one forming the floor. It's sitting on a chair in my bedroom and I move the chair around depending on how strong the outside light is - sorry the picture is so bad - it was pretty sunny that day!
I then use the macro setting on my camera (Digital Canon Rebel XT) - it looks like a little flower, and the general use lens that came with my camera. I also take every picture in a portrait orientation (up and down) and use the smallest picture setting. That way I don't have to crop any of the pictures - it's the proper size for etsy. I use vista to auto fix the colors and then upload to etsy.
Hope this helps someone!