What is the best and cheapest digital camera to use to take detailed pictures of jewelry?

ANY digital camera with macro capabilites will do, but the BEST would be a digital SLR with a macro lens - a minimum $1,000 purchase. If you already have a digital camera, try this before you buy another.

Use your macro setting and experiment. Let's say you have a point and shoot camera with macro and a flash on the camera. You might have to go to a manual mode to do this, but...

Put your ring on a nice background surface. I like to just put it in a ring box. Zoom out at least half-way so that you will be working about a foot away from the ring. Be sure that you get focus confirmation. Shoot a picture USING flash. Check the LCD for the result. If you have overexposed the ring, use the EV adjustment to reduce the exposure. For small items, I often find that I need to reduce the exposure by about 1.0 EV. (That's -1.0 EV.) It is better to have the ring properly exposed and the background underexposed, so just worry about the ring for now. Using a deliberate underexposure will cure the "too shiny" appearance of the stones.

If you know how, you can use either full manual exposure or just Aperture Priority and choose a smaller aperture (larger number) to make the ring show up in better focus.

If you have a DSLR, post your question again stating the kind of camera that you have and the lens that you are using and we will give more details.

If you are doing any image processing at all, such with Photoshop or it's cousins, you can crop the image to 800 pixels by 800 pixels and use Supersize images on eBay. I always use the Picture Pack when I am selling anything of any value.

Check out http://www.members.aol.com/swf08302/hear... which I did a while ago using a Nikon Coolpix 5400 exactly as described above. I do NOT think this is acceptable, but we decided not to sell the ring anyhow, so I didn't bother to do a better job. It's still better than some I've seen. I don't keep old photos of sold items around, so I don't have much to show you, but at least you know that it's possible to get an acceptable result even without spending huge dollars on your equipment.

The key things to remember are:
-Macro setting
-Zoom out to get about a foot away from your subject
-Use flash
-Try different EV settings and expect that you will end up with a negative EV setting, such as -1.0 EV.

Here are a couple more auction photos done as described:

800 x 800 http://www.members.aol.com/swf08302/york...
800 x 800 http://www.members.aol.com/swf08302/mont...

I found this great deal here:
http://nyonlinestore.com/dealaday.html
That's I think the cheapest digital camera you can find anywhere.