PATIENT CHARACTERISTICS: Age: 16 and over Performance status: ECOG 0-2 Life expectancy: At least 6 months Hematopoietic: See Disease Characteristics Granulocyte count at least 1,000/mm3 Platelet count at least 100,000/mm3 Hepatic: AST and/or ALT no greater than 1.5 times upper limit of normal (ULN) Alkaline phosphatase no greater than 1.5 times ULN Renal: Creatinine no greater than 3 times ULN Cardiovascular: No uncontrolled hypertension Other: Not pregnant or nursing Negative pregnancy test Fertile female patients must use 2 effective methods of contraception (1 barrier and 1 hormonal) during and for 1 month after study Fertile male patients must use effective barrier contraception during and for 1 month after study No other medical condition that would preclude long term use of prednisone or thalidomide No other malignancy within the past 5 years except adequately treated squamous cell or basal cell skin cancer or carcinoma in situ of the cervix No diabetes with end stage organ damage No history of gastric ulceration or bleeding No avascular necrosis of the hips No peripheral neuropathy causing symptomatic dysfunction Sensory symptoms induced by vincristine allowed No demonstrated hypersensitivity to thalidomide or its components No other major medical illness that would increase risk or preclude study No employment that prohibits the use of sedatives (due to known effect of thalidomide)