The right lighting when shooting product pictures or eBay auction photos can make the difference between sale or no sale. Get it wrong, and your item could be washed out, dark with muted colors, or have harsh and distracting shadows.
First off, odds are pretty good that the flash on your digital camera isn't too great. It's better to disable it (or if that isn't available as an option, cover it).
Ideally, you will have studio lighting. This Single Light Umbrella Kit is inexpensive, and includes a light stand, light and an umbrella to soften the light.
If you want to save money, you can use a directional lamp. Get a light diffuser or reflector, or point the lamp at a wall near the object to bounce the light and lessen the harshness.