S0204 Thalidomide, Chemotherapy, and Peripheral Stem Cell Transplant in Treating Patients With Multiple Myeloma

RATIONALE: Thalidomide may stop the growth of cancer cells by stopping blood flow to the cancer. Drugs used in chemotherapy work in different ways to stop cancer cells from dividing so they stop growing or die. Combining chemotherapy with peripheral stem cell transplant may allow the doctor to give higher doses of chemotherapy drugs and kill more cancer cells. Giving thalidomide before and after peripheral stem cell transplant may be effective in treating newly diagnosed multiple myeloma. PURPOSE: This phase II trial is studying how well giving thalidomide with chemotherapy and peripheral stem cell transplant work in treating patients with newly diagnosed multiple myeloma.