I've photographed people using everything from Sinar 8" x 10" sheet film cameras to 35mm point and shoot models.
Marianne, seen here and here was captured using a 3 megapixel Olypmus C3000 camera.
Of course you must know how your equipment works. It's disheartening and breaks the rhythm of a shoot to have to photographer constantly refer to the instruction manual. Bottom line: KNOW YOUR EQUIPMENT!
For sheer versatiliy, you cannot of course, beat the (D)SLR system with its modular build and range of accessories. For indoor shooting I recommend an SLR with a lens of around the 28 - 135mm (17 - 84mm in a small sensor camera) zoom range and a separate flashgun capable of being "bounced".
That is basically all the kit you will need. Take lots of pictures and shoot in your cameras' RAW format (if it has one). In this way, you will have at the close of the shoot, the highest quality images that your equipment is capable of recording. The RAW format will ensure that any needed colour corrections and exposure adjustments can be carried out in post processing.