Patients receive bortezomib IV on days 1, 4, 8, and 11 and oral thalidomide once daily on days 1-21. Treatment repeats every 21 days for at least 4 courses. Patients who plan to undergo transplantation AND achieve ≥ 50% reduction in the tumor burden proceed to transplantation off study. Patients who do not undergo transplantation receive 2 additional courses of therapy beyond best response for up to 8 courses in the absence of disease progression or unacceptable toxicity.