[gavinpc]

I evacuated from (my hometown) New Orleans just prior to hurricane Katrina, leaving a startup that hadn't paid me for months. I used freelancer.com (then getafreelancer.com) for about a year to get started on my own (in Oklahoma, long story).

It was a horrible experience that I wouldn't wish on anyone, for the reasons already mentioned (impossible competition, losing rates). But I made contacts that led to later work, and to this day I am working full-time at a good rate for a client that originally traces to that site.

My strategy was to make a "niche," specifically, a focus on quality over speed and price. I crafted custom letters for each bid, and my "English skills" paid off in some important cases.

So, if you have an alternative, I'd take it. If you don't, play the long game, and be zen about it.