Differentiate on Quality, Never on Price
I would write proposals by hand, in literate English, after reading and considering the project description. That alone would differentiate me from 90% of applicants. I'd then include a ballpark estimate along with my hourly rate.
The response I got back was pretty much always a variation of "Wow, you really understand our needs a lot better than anybody else who's responded. Unfortunately, your bid is 3 times that of the next highest bidder. Any chance you could come down a bit on price?"
My response to that would be some variation of "No.", and their response to that would generally be "OK, let's give it a shot."
Here's what's happening in that situation. I wanted the project owner to end up with two piles of bids on his desk. Pile A would have 150 English-as-a-second-language generic bids that didn't address the project at all and quoted $7-$14/hr rates. Pile B would have exactly one bid from a guy who obviously knew what he was doing and would definitely deliver, yet was quoting a much higher price.
At that point, the project owner has two choices: Sift through all the garbage in Pile A in hopes of randomly finding somebody good. Or spend a realistic amount of money with the guy from Pile B.
I got plenty of work this way, and as an added bonus it did a good job of filtering out the unrealistic "I need an eBay clone for $400" types.