Hiya Squallers,
For my box the sides are covered in a sort of shiny gossamer fabric. I can't tell you too much more about it, it was just something my sister had pack-ratted away. Really anything that's white and thin enough to let light come through should work. Of course, you don't HAVE to shine the light through fabric, but it seems to help soften the glare from the naked lightbulbs and spread the light around more evenly. All of the pre-fabricated product photography tents I've seen for sale online seem to follow this philosophy, as well (they're made from nylon).
I've gotten pretty good results with my lights-on-the-side configuration, but so far all I've done are simple package shots. For the more elegant, soft-shadowed Hellscream333-styled loose figure shots I'm going to need that extra light, so I plan to cut a hole in the top for a third light. What does the box you used for the last contest look like?