Home photo studio set up?

I have a nikon D40 camera, I would like to set up a photo studio to take professional looking photographs. What kind of equipment do I need? I'm confused about the lighting that i should i buy. Do i need lights or umbrella flash units.

Visit a couple of local photography studios and see what they use.

You will need at least three or four lamps to shoot portraits

* Key light
* Fill light
* Background light
* Hair light

Placing a shoot through umbrella will soften the light, something portrait photographers use a lot. Those go on the key and fill lights

You will also need some kind of background stand and a few muslin backgrounds in different colours

Learn from a master of light.
Helped him start out with used studio strobes.
You can get his book from a number of places. See the link.

Lighting is one of the most important parts of a photography studio. A few soft and wide flood lights with one or two tight spot lights are the bare minimum for a lighting setup.

Umbrella flashes will give you some extra power, but you still need some base lighting from a different angle so that the strong flash dosent make black shadows that hide half of your subject.

Please go learn about photography before you spend a penny. If you were prepared to shoot with lighting you wouldn't be asking these questions. I'm not trying to be rude, I'm trying to save you a lot of money and time.