All my shots are done with flash now, very similar to the set up you just described. Instead of studio lights I am using speedlights (same type of flash that mounts to the top of your camera) mounted on stands with wireless triggers. As far as constant lighting, the best I have used is natural daylight CFLs, set you white balance to daylight and it will give you beautiful clear white light. As far as bouncing light, the best thing to use on the cheap is pieces of white foamcore. Try this experiment to see what I am talking about: have someone stand next to a window during the day with the lights off in the house. Have them stand at a 90 degree angle to the window so the sun is shining on one side of their face, the side away from the window will be shadowed. Have them slowly pull a piece of foamcore up to their face from the opposite side from the window. Watch the light fill in their face with light. This will give you a nice 1:4 balance of light with 1 light source.

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