I do photobooths at weddings, it's a great deal. $600 per wedding and all I needed was some background equipment and lighting.
-Lighting(I would recommend hot lights or studio lights like alien bees, I use yongnuo flashes on cowboystudio transmitters/receivers and I go through a ton of batteries).
+ Black/white muslin
-Laptop(extra monitor helps too, so they can see themselves like someone mentioned).
+ software (I use DSLR Remote Pro from breezesys)
I have two of these, just in case one fails.
-Props(hats, boas, etc)
Basically, you setup your backdrop, put your laptop on a table, hookup your camera to your laptop, turn on your photobooth software, set your camera to a small aperture(f8 is probably the minimum), set up your lighting, and for the rest of the night you just click once people are ready for the photos, let it go through 4 pictures, re-load the printer with paper and ink a few times, and that's it.
I setup my printer so that it prints 2 copies side by side of 4 pictures, the top usually says the couple's names, then the bottom left is the date, then the bottom right is my business name. The people will take their pictures, then come grab their print(takes about 50 seconds to print with those pictures, there were never any lines of people waiting for photos). The people will then cut the print in half, taking their half home and leaving the other half for the bride/groom to scrapbook.
I've made about $1200 profit this summer after buying all the setup equipment I needed. It's WAY less stress than a wedding and you make great cashflow doing it. I would recommend that if you do decide to start a photobooth business that you call/email all the local wedding photographers possible and offer your services to them as an add-on package, offer them 10% of your profits and they'll love being able to offer a photobooth at receptions. Get business cards and make some moolah!