In these difficult times there may be some shady contractors or even fly-by-night guys out there. If you want quality work there is a price to be paid. Here's a good saying: "Cheap work isn't good and good work isn't cheap." Not always the case, but something to keep in mind. I know statistically the price of work has come down, but the price of material has not. So you might find the contractor cheaper, but expect to pay the same if not more for material. Many contractors out there are willing to discount their work just to get the job and there's nothing wrong with helping those in your community out. The things I would watch out for are guys you charge not only for material used on the job, but all the material they bought and maybe even contractors who charge by the hour. In remodeling you don't know what you are going to find behind drywall or plaster or under the floor or in the pipes until you get into it. There's nothing worse than under estimating and over paying. For me it's just easier to charge by the job and then however long it takes is on me. It also may be a good idea to check with your local Chamber of Commerce to see if the contractor is a member. The guys who invest in their community are the ones you can normally count on. Also, if something should happen to be wrong or go wrong after completion, a good contractor will come back and fix it at no cost.
There may be some unique situations also. If you know a contractor personally or have a good relationship with one, there may be times where some "experimentation" comes up. New systems or new materials may be introduced or maybe it's just gain some experience, the contractor may approach the home owner with this idea. I guess the home owner may approach the contractor with this idea, who knows it's a crazy world. If this situation does come up you ,the homeowner, could possibly get the work done for the price of materials. Just saying, if you don't mind being the guinea pig it might be a worth while venture.
All in all, remodeling and renovation don't have to be scary or bad projects. Make some lists, decide what you want and start asking questions. Contractors may not have all the answers and may have questions themselves. It's going to take time, life isn't a one hour tv show, it going to take some money, and there will be dust. Remember, the lowest bid isn't always the best and the job will only be as good as the material you are working with. Don't expect a million dollar bathroom for two thousand dollars. Happy remodeling!