A couple weeks ago, my friend Dave came over to help me with an idea that we have had for a while: to make a portable sound booth to record audio for animation projects we do in our spare time. I set out to make it as cheaply as possible, and the grand total of this setup was just over $30. ($6 for the foam from a craft store, $25 for the mic from Radioshack.)
Basically we took a couple diaper boxes and cut and hacked at them for a couple hours until we had whittled them down into one smaller 5-sided box. So, yeah, two boxes to make one smaller box.
A piece of foam was adhered to each piece side of the box and the pieces were "designed" to fit together in a puzzle-like configuration that could be disassembled and packed away. As it turned out, the pieces didn't really stay together nicely, so I had to tape it together so it would hold.
But it sounds pretty darn good. And I feel very MacGuyver-ish.
p.s. since then, i've found this article on making something very similar that looks a little more professional.