Strobist has inspired me to really go after off-camera flash. Strobist is such an awesome resource for learning how to use cheap flash to get quality results.
I obtained a Sunpak 383 flash (~$80 new from B&H) along with a variety of connection devices like an optical slave ($11 on e-bay), wireless radio trigger ($30 on e-bay), and hot shoe to PC cable connection ($9). Then, I obtained an umbrella ($18 from B&H), umbrella bracket ($15), and stand ($20 from B&H). The combination, along with balancing ambient light, allows me to really control my lighting and put a nice polish on pictures.
For instance, about a week ago (right after I got the umbrella and stand) I set up a little studio in my kitchen. The picture of my daughter's "Teddy" above is a result of the set-up (trust me, the pics of my kids are much better than the lighting test above). I was amazed how easy it was to set up and balance yet get very professional looking pictures.
All told, I've maybe spend $200 on flash equipment, with more on the way. I'm trying to do it as cheaply as possible, but having large quantities of portable light allows you to be really flexible when you are taking pictures. If I did it again, I might save a bit and get an old Nikon flash to start. SB-24s are very popular, although I've just purchased a broken SB-20 on e-bay (hopefully I can fix it) and I'll purchase another when I can get a good price. If I can fix them both, that will give me two more lights. SB-20s go for $30 or so (including shipping) but they have all the necessary ingredients for a flash (although less power than the 383).