I believe setTimeout is good enough for your needs. I am, myself, facing a similar situation and I am going with setTimeout.
This awesome article on BNG helped me better understand what a I have to do (or, at least, try): Real Time Multiplayer in HTML5.
About the link: It talks mostly about the multiple game loops and networking them. It's pretty cool. Below, an excerpt.
When it comes to a real time game, we want to run the game logic itself on the server AND the client. This is due to the fact that the server needs to be the authority on the state of the game at all times, but the client needs to run the game locally too. Each frame on the server, input from the network will be processed and applied to players, and that change is sent to the other players at a fixed rate. On the client, input will be collected and sent to the server, and positions can be updated while waiting for the messages to come back from the server (client prediction).
It's a highly recommended read. At least by me. =P