I found this post disappointingly short on administrative details, unlike Max Klein's earlier Rentacoder-related post, which is surely the definitive reference on this subject:
http://blog.cubeofm.com/the-subtleties-in-outsourcing-using-...
http://blog.cubeofm.com/the-subtleties-in-outsourcing-using-...
The trick really is in getting rid of 99% of the applicants, and then paying well and being nice to the person you choose.