Being a poor student who scrapes a living through Rentacoder, Its difficult to explain further without getting lost when someone raises an eyebrow at freelance web design.
Given the diverse range of economical backgrounds coders come from for Rentacoder projects, Making being undercut quite a common occurrence, your looking at $15-20USD per hour on a run of the mill job, Providing you have decent enough ratings and offer a decent comment to show your competence and experience.
Personally I prefer to have no more than 3 projects happening at any one time, But its a risky job to have as your primary income, So you take what you get, when you get.
Its definately a great place for making some quick cash on the side. And I've always enjoyed being able to have a bash at new challenges I might not find elsewhere.
I'm also a college student and web designer myself, but have stayed as far away from Rentacoder as possible (except when outsourcing parts of my own projects). Competing on price with people overseas isn't a place you want to be in.
Get the word out about yourself among people you know, put up some Google AdWords targeting your area, put some SEO focus on "[city] web design", and have a decent portfolio online. I always tell potential they can find a much cheaper way to get online, but that your work is of much higher quality (more attractive design, WordPress or ExpressionEngine so they can update it themselves, SEO to bring them business, etc.).
This is actually far more interesting than the article. I tried using Rentacoder for a while, but after getting turned down for ~20 jobs, and seeing what someone the winning bids were, I stopped doing that fairly quickly.
The main problem with Rentacoder and like websites, is that you need to find very small projects to work on, and bid some pathetic amount to get some ratings going before you can look at some real money, Or severly undercut yourself, and waste a heap of time for relatively no return.
Some of the best people on oDesk are making 80k USD a year fulltime, or 40k working half-time. That's not bad. Too bad there are only a small handful at that level.
I'm an independent technology consultant myself, and constantly struggle to find leads. I've heard mixed results on guru and oDesk ... at the startup where I'm CTO, we've hired people specializing in niche ecomm packages off of elance _dirt_ cheap ... shamefully cheap. Typically from Malaysia.
For specialized niche sort of work, it typically took longer than expected, but the quality was reasonable. Not guru-level, beautiful code necessarily, but workable where it counted -- when interfacing with various third party packages, being used by other third parties, without support from us.