[IgorPartola]

So this works really well when you are working with the designer. When I can walk into your office and say "hey, can you pull up the dev site and take a look at page X? I think we need to figure out a better way to display this" I am very happy. Even mediocre designers can deal well with this modus operandi and produce much better than mediocre results.

Where we run into a problem is when a client hires a design firm, works with them for months on a new site or application look and feel, gets invested in it, pays the designer and maybe even starts development with a few days' overlap with the dev shop. Another example is when you deal with extremely low budget jobs (less than $1k), where you are simply trying to minimize hours spent on a project. I have done WordPress themes off good, clean PSD's only in less than 8 hours. I have also spent close to 80 hours on some where the PSD's were super detailed, but lacked any kind of direction. When the designer or the developer is not in-house, communication is key, but is often a place where costs are cut.

[grey-area]

I truly believe both design and development must be ongoing and collaborative processes, and the problems you've identified above are all down to trying to divide work at points where it cannot usefully be divided - the first scenario you mentioned is the only way to produce good design IMHO - as a collaboration with the client and any other parties like developers.