How should I light a small tabletop scene for stop-motion while preserving miniature practical lights?

I've been involved in a number of stop-motion short films over the years. Here's some things I've found that you'll need if your goal is to have the best look possible:

1. Continuous lighting. Continuous lighting will allow you to shape your shadows before you shoot your scenes.
2. Big lights. With small lights it can be easy to end up with a situation where one part of the scene is 'dialed in' and looks right, but another part of the scene looks off. The bigger your light source is (or light sources are), the easier it will be for you to make every part of the scene look right.
3. Get them far away. People tend to underestimate how far away their lights will need to be in order to not cast harsh shadows or have the lighting be 'right' in one part of the scene, but 'off' in another part. This can be offset somewhat by...
4. Add diffusion. You'll probably want to diffuse the light in order to knock down the shadows, but also because unless you have a very large space with which to hang lights, you'll probably find that you don't have quite as much room as you'd like (do we ever?).
5. Watch your shadows. In stop motion it can be very easy to cast too long of a shadow, which can ruin the illusion (e.g. the shadow of the streetlamp in the scene stretches halfway down the block, which doesn't happen in real life and looks 'wrong'). The solution is usually to get the lights up high in order to shorten any shadows to a 'realistic' length. This is the real key to keeping up the illusion, and generally its the first thing you want to check for as you're building the lighting for your scene.

Generally speaking, 'house' lighting is potentially just fine as long as you can combine individual sources in order to create a larger level of illumination than can be achieved by just a bulb or two. The real key is knowing how to wire up enough lighting elements to get the job done. Where 'pro' level lighting will shine (har har) is in being able to illuminate a larger space with fewer total elements. This is important because unless you're using a warehouse or a large garage type space, you're probably going to start running into heat problems, so it potentially becomes a tricky balance between the level of light you need to have, and the level of heat that you can't afford to deal with (think melting sets, or melting crew members...)

Now having said that, I have worked on productions that have rented (or in one case owned) 'pro' level lighting equipment, and I've also worked on productions that have successfully used common halogen worklights such as those which can be found at a home improvement store and homemade scrim (halogens are dirt cheap, but they throw a ton of heat, so you'll want to take that into account before going this route).

While I won't claim that 'quality' light isn't important, in my experience it is far less critical than making it big, making it diffused, getting it as far away from your scene as possible, and engineering the angles to produce the most 'realistic' shadows. With stop motion it really is all about combining these variables to produce the most realistic shadows possible (either that or completely eliminate the shadows entirely) in order to preserve the overall illusion...