We (http://feefighters.com) found our lead designer in Bulgaria. We posted a project on Crowdspring where we asked for a redesign of TransFS.com. Tisho (http://twitter.com/tisho) did such a good job that we brought him on full-time.

We don't have any communications/timezone/culture issues at all... he knows American pop-culture better than most of us do (thank torrents for that I suppose?), his English is impeccable, and the time zone thing isn't usually an issue because we all have crazy sleep/work schedules anyway.

On a related note, using 99designs, Crowdspring, Elance, etc are great early on and then if you find someone you really like, hire them!

That being said, Tisho says that is a pretty idealized picture of Bulgaria... Folks aren't necessarily as highly experienced & motivated as this would suggest, and taxes aren't as low as this article suggests either.