TisIndia.com is best. They worked for me and still working on my projects. There services is excellent.

www.raysiti.com

It depends. If are looking for a small or medium sized company, make sure the founders are passionate about software. Otherwise, you will end up getting run-of-the-mill stuff. Talk to the developers and see if they can communicate well. Check if they have testers and if they have some basic processes in place. If not, then it's a risk. If your application requires domain expertise, you need to chart out a timeline with the offshore team to build those skills.

I used Indus.. I am not a engineer so it was a learning experience. They speak a different language people who do code and design. It took me time to get use to it and a lot of frustration. Often you think you are clear on things and your not. At Indus you had to manage the workers. So you in essence did not hire a company but a person. Guy engineers kind of sucked because they always left for other jobs. Women were generally good but finding a great engineer versus an average one is the battle.

Designers are another boat altogether. You should stay up nights during the design process cause sometimes you will be you did what.. it is 3 times more productive to worth with the design team. Engineers, well they are different cats. They like to be left alone to code.

The hardest part was being patient. Mornings are hell, and I would suggest drink a coffee, take a shower, have morning fun with your wife.

To make it easier prepare yourself with good software to communicate things better. 16bugs is a stupid simple bug tracking software. Beyond easy and really cheap. jingproject.com is a way to take quick little screen shots and annotate them. Free, they do have a paid version which is $10 a year..

there are companies that will do the managing of India for you. stayawakedesign.com I believe does that type of work. If I had to do it again I would likely drink more.

Last thing I will leave you with is although they might know all types of code it does not mean they know how to code an iphone app, or fb app. Sometimes you have to teach them where to look. It is annoying..

One more thing. Legal contracts are tricky cause how are you going to enforce them? Make sure you have something that says the code and work is yours. Other than that you have to trust the forces of the market. Meaning bad reviews can kill there businesses.

Good luck

The main point I would make is, buyer beware. There are great developers around, good developers, lots of not so good devs and some plain bad ones.

I have yet to meet an Indian software developer that will say, "We can't do it." Ask for references and check them out. Ask for a bit of the development upfront without any cash down to see how they do the work before you pay anything. This will also reveal if they are up to all the latest coding technology available in the U.S. (especially useful for web 2.0 development) Never go into an asymmetrical relationship, by that I mean if you are a small company don't set up a relationship with a very large or a large company but be careful of one man outfits. Deadlines are based on IST, Indian Stretchable Time. Will be done soon could be tomorrow, next week, next month, next few weeks...

U.S. legal agreements are useless except if enforced in the U.S. The Indian courts are overloaded and your case may get heard when your kids graduate from college.

Having said all this to soften you up, if you come across a good development group the communication is easy because most speak English well and they'll deliver in the end if you are professional and keep them on the straight and narrow.

Vinfotech.com is the best! Their @clinicyou project (recently launched) is amazing. Found them on twitter @vinfotech.

Cheers