I prefer to work through Guru.com's escrow system for initial projects with new clients. After a working relationship is established, other methods are fine.
I prefer email or the Guru message board for communication, as these methods provide both parties with documentation to refer to. I'm happy to introduce myself via Skype for those who like to make sure they're talking with a real person.
For extensive projects, I may require a deposit. This is always refundable if the finished project doesn't meet the client's expectations.