It's definitely all about the light (and depth of field, as Jocke mentioned). With today's cameras, even without a macro lens you can crop close enough that IQ is still right up there, albeit that a macro lens is certainly more fit for purpose when it comes to watch photography.
This is the default set-up that I use, although I'll often dispense with the on-camera flash and may switch the lights around a bit if I can be bothered. I have no dedicated shooting area and almost no room to manoeuvre and reflections can be a b*stard, but it works well enough most of the time. Oh, and I'll sometimes use a snoot on one of the lights, instead of an umbrella.