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I've done mostly nature photography up to this point but later this month a friend is having a birthday and she just had a daughter so I wanted to take some father/daughter portraits.
So now I'm looking for a lighting kit I can use with my D80 which doesn't break the bank.
I'm going to recommend slightly less than half of what @cmason suggested: One light, one umbrella, one light stand. See also the Strobist starving student kit. You can get an SB-600 and then have wireless control over your camera for not much more.
The reason I recommend one light over two is that it works just fine for a lot of portraiture. (Check out the excellent Q&As tagged with lighting basics; most of the techniques are based around only one light). Make no mistakes, having two (or more) lights gives you more flexibility than just one. However, you are looking to "not break the bank", and so starting out simple seems advisable. You might also want to get somewhat different components as you upgrade over time: a different make of flash, a soft box vs an umbrella, a different stand, a different triggering system, etc.
Also, I don't think a super clamp is strictly necessary. I definitely wouldn't get one instead of a light stand. Again, it's worth having once you're ready to spend more for more flexibility. (Don't forget though that you'll need an umbrella/hot shoe adapter for your light stand.)
To start out I would recommend you get a single unit like a SB600 with light stand, clamp and either an umbrella or a soft box or both. What I would definitely also add is a reflector which will give you a lot of possibilities over just using a single light. A reflector is a lot cheaper than a second light but can be set up to provide fill light. A good reflector is also very useful when shooting in ambient light. Overall I would advise you get kit that gives you the most possibilities with minimum outlay at first, you can get the more specialised pieces later on. A single light and a reflector will give you the most possibilities for the minimum outlay.
Just a brief thought that came to me reading all the answers: everyone is recommending an SB (or more). Nikon's SBs cost really too much (even used) to be mentioned as the only choice for a simple starting kit.
Other reputable brands (Metz or Lumopro would be my choice, but also Nissin and Sigma have nice products) actually make comparable hot-shoe strobes of very good quality for 1/2 or 1/3 of the money. I'm not talking 50$ chinese stuff that comes from ebay in a pink package.
SBs (except the minimalist SB-400 we're not interested in to the purpose of off camera lighting in this context) are excellent, well built, powerful, durable; you get what you pay for. I just wanted to note there's some good strobes out there one should consider when building a kit on a budget.
Two SB600s or an SB800+SB600, two Impact 42" umbrella's, 2 clamps, two light stands. Put your D80 on Commander mode, and have fun.
Off-camera flash kits suggested in other answers will give you great results if you have time and space to set them up.
However, if you are looking for more ad-hoc and less intrusive photography or a more minimalistic kit, I'd suggest the setup I already briefly described in another answer:
Usage of such a kit is based on bouncing the light off ceiling or wall. For a less flat, directional light, make sure the bounce area is on your side, not directly above you. Wrap the foamie thing around flash head so that direct light does not reach neither your subject nor anyone else's eyes.
Here's my recommendation for getting started. The basic budget is $700, with a few options bringing it up to $1000 or so. For many new photographers, that might be sticker shock, but it's cheap in the world of studio gear. And, this is all stuff which can last a long time, even as your photography grows — and, it's completely brand neutral, so even if you decide to switch camera systems in the future, it can stay with you.
I don't know if $700 will "break the bank" for you, but figure that this is in the same range as a nice lens, and under the price of many, yet it opens up a door to a whole new area of photography in a way beyond what the purchase of a lens usually does.
I'm going to link to purchase pages from camera retailer Adorama. I'm not affiliated with them, and you can get all of this stuff elsewhere (Amazon, B&H), but Adorama happens to sell the flashes I'm recommending under their own house brand, which is nice. (They're also one of the handful of very reputable online camera gear stores.)
So, first: the Westcott Rapid Box Kit.
This includes two softboxes, one a narrow rectangle and the other a larger octagon. That's enough to get you started with a lot of the techniques in our lighting-basics series. It also comes with two light stands, which are pretty flimsy, but serviceable. So, this kit, $400.
You can get cheaper softboxes, but these are really easy to set up, well made, and nicely portable. They're small, which means you need to get them close — not necessarily a bad thing (or hard!) for indoor amateur portraits.
These softboxes are made for hotshoe flashes, so that's the next thing. I highly recommend the Godox V850 flash. This is a cheap but powerful all-manual flash, with two notable features. First, it uses a lithium battery for quick recharge time and in order to get hundreds of flashes without recharging. This is pretty cool (although of course can actually be a downside if you forget to charge — you can't just run to the corner store and pick up some fresh AAs). More importantly, they have a cheap option for add-on radio control, which lets you set power levels from the camera.
If you're in the US, the Flashpoint brand from Adorama is a good choice — they call it the Flashpoint ZoomLion. Otherwise, you can get Godox V850, Neewer TT850, or Cheetahlight V850 — all exactly identical (and interchangeable, except for where you get service from).
You'll want two of these, of course, so: $200.
You also need to add a transmitter and receiver set
plus a receiver for each additional flash. For the two flashes, that's another $100.
You can get more sophisticated radio control systems. These generally cost a lot more. They'll have advantages, like being able to be used with other brands of flashes, better range, and possibly better reliability (although I've had zero problems with that). And, you can get remote flash systems which offer automatic "TTL" exposure control. You don't really need that — and arguably, you don't even want it. The lighting conditions in your setup won't be changing rapidly as they might out in nature or moving around, and the camera's guess as to how light is going to fall in three dimensions is just plain going to be naive. It's better to set the values yourself. The nice thing about this setup is that you can do that from the camera — no need to go fiddle with each flash individually to change the levels. (You can have 16 different groups with different power levels, by the way).
So, that's the basic $700 setup. If you can go all the way to $1000, I'd recommend also adding:
That'll bring you to around $1000. A bunch of clamps, clips, and related accessories would be nice too, but I'd wait to buy those till you see what you want to hold where. And a dark backdrop is helpful too, especially if you're in a small space. (In a large space, you don't need a backdrop for pure black backgrounds.)
