I have successfully used Perl contractors from overseas. Things to think about:
find programmers that work your hours if possible
as mentioned before, your specifications and requirements must be really precise and detailed
get a list of Holidays they take ahead of time, October is a big holiday month in India
at the end of each shift have them send you an email with what they got done today and what they expect to finish tomorrow (and hold them to it)
overseas workers are much more open source oriented
I have found that oversease programmers with 3-4 years experience solve problems as well as US programmers with 1-2 years experience, so look for 5-10 year programmers if you have a complex project
I have found programmers from India are coders not problem solvers, so hand holding in tricky areas will be required
As for what I pay, I have found a couple of groups that do solid work for $2000/month for 160 hours. I don't agree with the you get what you pay for posts. I have had both really poor code and really great code written by $150/hour programmers and I have had some really fantastic code written by $10/hour people. With cheap programmers it is really easy to set them up to do one of those tasks you would like to have done, but never have the time to do. Then see if what they produce is worthwhile (give them a strict deadline as well to see if they can meet that). If not you haven't wasted an arm and a leg in fees. If everything turns out well you can give them a bigger or more critical project, just like you would with a new staff coder.
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