Hire them on contingency, and then verify their results.
Use something like http://zoomrank.com/ to monitor the position of your site in the various search engines over time; establish a baseline, hire the SEO consultant, and look at your placement graphs. Did you fail to improve, or even go down? Then don't pay the snake oil salesman.
As a marketing consultant: No, usually you cannot. There are great ones out there, but for most people it's too difficult to screen out the quacks. Go by referrals.
Nope. Can't trust SEO consultant, its also hard to trust company/product that uses SEO consultant's services. If somebody have good/reliable products or services, they don't need any phony SEO tricks.
Is the best content is always #1 in Google? I wish that was the case, but it's not. Until Google can evaluate content without external 'signals' SEO will be a fact of life.