This won't eliminate all ambient noise like a true sealed sound proof room, but when you can control or eliminate sound deflections that can reach your microphone, it takes your audio to another level. An excellent tool when doing voice over or narrative work to your videos. Here's another cool looking portable DIY sound booth for microphones. The walls break down using Eyelets and Hooks when not in use. [Thanks Joel]

Materials
$109 Auralex ... Box of 24 Studiofoam Wedgies (enough for audio walls, plus a back wall that I built to put behind speaker. Use Liquid Nails to glue the Wedgies to the particle board walls).

$10.75 1/4" 4x4 sheet of Particle Board @ Home Depot (probably need 2 sheets)

$1.18 Metal Eyes @ Home Depot (pack of 8)
$1.18 Metal Hooks @ Home Depot (pack of 4)
$2.29 2x2x8 Wood @ Home Depot (use for reinforcement on walls. The amount depends upon how much you want to reinforce, but you will definitely need these to anchor the Metal Hooks and Eyes for attaching the side walls to the back wall - and for the ceiling to prevent sagging)

Dimensions
Ceiling: 35" wide x 28" Deep (it simply sits on the two walls with a bit of overhang)
Side Walls: 24" tall x 28" Deep (walls connect to the back with the eye hooks
Back Wall: 24" tall x 36" long

Clip on Ikea desk lamp for $5.99 (see photo).

For the not-so-diyers there are a number of these Portable / Collapsible Traveling Sound Booths available on both eBay (click here) and on Amazon (click here).

Portable Sound Booth