Outsource for productivity, not because of laziness

There's a ton of adverse selection issues, and I suspect a large part of it is due to the price point. People and startups tend to want to pay a very small amount of money for design and code, and as a result the best people will opt to go for higher paying gigs. And if you want to pay a lot, many jedi knights have become disillusioned and avoid working with you in case you decide to flake at the last moment. And god forbid paying upfront: you don't know what you will get.

There is also the strange model of communication. Some places side with the developer and other places side with the sponsor (in the sponsor case, they present the spec and if the developer doesn't perfectly match the spec they won't get paid)

It's really ironic to see this and other similar posts recently, given that I'm about to launch a site to address the stated issue: http://codewren.ch

But more generally, the best option is to work with a friend or a friend of friend.

I've had very good luck with eLance. I've hired an illustrator, a proofreader, a designer, a virtual assistant and a marketing consultant. All of them were great, and very affordable.

Make a good ad, and include some kind of filter phrase that makes people prove they read it. Then look at their reviews, and general proposal.

You can usually start work on a trial basis.

Sorry, I wasn't sure if I should address that in this post or not. I'll write another one about finding and validating a developer/designer/whatever. It's a mix of methodology and black magic...so I wanted to keep this post on-point for one topic.

For small things, I use oDesk. The PSD-to-HTML slicing and part-time developer were both found through oDesk. I've also found good help on oDesk for other things like audio transcription and data-entry.

I found my designer through Forrst.

It doesn't matter what website you use. There are competent and incompetent people on all of them.

It really comes down to "you get what you pay for"

You're either going to pay a decent amount for someone with a lot of experience, references, and past work to show, or you're going to take a gamble on someone with less work, and less references, but seems trustworthy and competent.

If you're looking for long term staff, give them a small test project, see what they're capable of and make decisions from there.

A "what website should I use" mentality is the worst approach you could possibly have when hiring.