So here's my setup. I have two lights, one above and to the right (looking at the subject), and one above and to the left, pointing toward the background as much as possible. This highlights the white background without casting too much light on the subject to wash it out. (see pic 2)
Then I cut a round hole in a piece of white posterboard to fit around the lens of my camera (see pic 1). Conveniently the focus ring on the lens has a lip that holds the posterboard in place so I don't have to hold it. This white posterboard reflects the light back onto the subject but not too harshly. See pics 3 and 4 for straight-from-camera and final pics for CA-02 Flameblast
. Since my camera shoots RAW photos, I can do some correction before doing any final cleanup. I can white balance it easily, and I up the "Detail" slider to about 50 (out of 100) to make edges and blacks pop a bit more. Then in PS I just macro a thin white border around the image and adjust Levels to lighten everything until the background blends into into the white border. If the subject ends up washing out during the Levelling, I back that off a bit and use a 25% soft eraser to clean up stray shadows.
I usually have to do nothing more than that. It sounds like a lot of steps, but in reality it's much simpler than what Hellscream333 (Dx3 now?) showed. No custom cut-outs, no tedious erasing for the most part.