I've actually found that freelance Web developers tend to be the most affordable and effective way to get things built on the Web. The tricky part when dealing with freelancers is that it's difficult to find quality, top notch workers. Where do you start? Most people think Craigslist, or ask a friend, but there is no good answer for how to find quality freelancers, although, they are out there.
I have some background in Web development, so I have a baseline understanding of what to look for when looking for freelance developers, and where to find them. If you are looking for affordable Web development, a good freelancer is the way to go. They are typically easier to work with, as they are independent business owners themselves, so they are willing to negotiate. They need your work to survive, so they will do what it takes to get the job done. The difficult part about working with freelancers is finding the good ones...
As a PM for an Internet company a couple of years ago, I have experienced more problems dealing with expensive development shops than I have had problems dealing with independent freelancers. This may be completely opposite of what others have experienced, but at the startup, we simply didn't have the cash to spend on dev shops, so we turned to freelance.
There are good resources out there for finding good freelance work, http://www.readydone.com is a company started by a couple of freelance buddies of mine. It's an online community of freelance web developers, designers, and business professionals. Basically, they are the Craigslist of freelance web developers.


