Kate Walsh: Homemade Album Tops iTunes Sales
Kate Walsh is at the top of the UK iTunes charts, and doesn't even own an iPod. She recorded the whole thing in a friend's bedroom, using velvet curtains for sound dampening. Total cost of recording her album, including costs associated with starting her own record company, Blueberry Hill: about five hundred bucks.
(Note: above link goes to newspaper story, which, by the time you read it, may not have the annoying repetitions-of-multiple-paragraphs which made reading it the first time an exercise in real life deja vu and/or Alzheimer's.)