Best way to learn Chinese ( Mandarin )

I suggest Chinesepod. The service is relatively cheap, there are a ton of resources for learning there and the podcasts are generally much more interesting than Pimsleur and other methods. I signed up for Chinesepod a little bit before I took a college class for Mandarin and I believed Chinesepod to be better for learning the vocab and characters. The college class was obviously better for pronunciation and real conversation because we had a great instructor and podcasts don't give feedback. You could supplement Chinesepod with remote conversations and tutors though. I believe they also have a network for this sort of thing. It's the cheapest option I know of.

If you have no funds at all, then you could probably find people willing to have conversation with you for free through the net and teach you some things in exchange for you offering the same with English.

+1 For the recommendation of Chinesepod. Dimsum http://www.mandarintools.com/dimsum.html is pretty good for translation and the like. The other thing to do is install QQ and talk to Chinese students and the like.

Honestly though, the cheapest way would be get a job in China, get yourself a Chinese girlfriend/boyfriend and don't hang out with expats. Pick somewhere other then Shanghai or Beijing, (Haerbin is a good choice) and immerse yourself in the culture. Also you need to accept you wont be fluent unless you do this for 5 years+

Why cheapest? Well its pretty cheap to live in China. You spend more money in any western country living then you would in a smaller city in China, and you can dedicate yourself to learning the language.