I recently came across an article on Promotion a la Carte that talked about how more and more authors are turning to self-publishing because it's getting harder and harder to break into the traditional publishing market. Read the full article here. It's short and very interesting.
Traditionally, an author submits a query (a letter about your book) to an agent or publisher. They either accept the manuscript, suggest the author edits and then resubmits it, or reject it. The process is slow, painful, sometimes expensive, discouraging, but potentially worth it.
When your work is accepted by an agent, the agent then submits your book to publishers until someone decides to buy it. The publisher then edits, corrects, prints, ships, and markets your work. There should be little to no cost to the author, and sometimes the author has little say in what happens to his or her work, including the book cover.
An author also has the option of self-publishing. "Self-publishing is the act of publishing your work independently of an established publishing house." - about.com.
Vanity Press: A publishing option in which the press with (likely) proofread and edit the manuscript, design a cover, print the book and even offer some marketing tools. All this comes at the expense of the author.
This is a very expensive option, but it might be the only one for authors who don't have the resources to self-publish through a POD (discussed below). This is a good choice for family memoirs and non-fiction, such as a business book, cook book, etc. There is some opinion that this is not the best alternative for fiction.
Publish On Demand (POD): A press that has the technology to print books only as needed. This eliminates the cost of warehousing books and keeping an inventory on hand. The author has total control and responsibility for content, book cover, and marketing. Some POD presses have editing and marketing options available, but at a cost.These services are completely optional with POD. If you are required to pay in order to have your book published, you are dealing with a Vanity Press. Note that Vanity Presses can have POD capabilities and may not require you to buy an inventory.
The cost to print with POD is more expensive per book, and, like I mentioned earlier, the author is responsible for editing and content. If you don't have the resources for editing your manuscript, you can either use their editing services (for a fee), or try the Vanity Press.
Most POD presses have the capability of putting your book directly to a major online retailer like Amazon or Barnes and Noble, as well as the option of offering your book as an ebook.
CreateSpace - Note Amazon.com is the parent company.
As you can see, if you are considering self-publishing, you have a few options and a little bit of research to do. Luckily we live in a day and age where making our work available is an option.
If you decide to try getting picked up by an agent or a publishing house, just be aware that you should never be asked to pay for any part of the publication process. If they tell you there are fees involved, that's a big red flag!