A vanity press is a
publishing company that will print your
manuscript for a fee. It is often used by people who are trying to distribute
propaganda or sell a
how-to book with an instructional course, for example. Most of a vanity press' business comes from hopeful
writers who have not been able to find a "traditional" publisher for their work, hoping that once the book is in print, its runaway sales will
force the world to recognize them.
A subsidy publisher is similar to a vanity press, but the costs are shared by the publisher based upon how successful they feel the book will be.
Once looked upon with distain, print-on-demand has increased the cachet of a vanity press, since one can now enter into agreements with them to create a book and sell it on a per-copy basis via the internet, a book club, or a catalog. This allows authors to self-publish with a real chance of developing sales through word-of-mouth, web advertising, and synergistic marketing methods like Slashdot writeups, special-interest conventions and meetings, and Amazon.com reviews.
With all respect to Lucy-S, although she makes some very good points, self -publishing and vanity publishing are two sides of the same coin. If you are paying someone to publish your work, regardless of your track record, you are self-publishing. Also, I said print-on-demand is improving the reputation of the concept of vanity press. I never said they were the same thing.
Also, the flow of money should be from the reader to the author. The publisher is just the middleman.
ADDED: I have recently published my first book, CYBERCHILD (read a preview at www.smartalix.com/cyberchild.htm), on my own using Lulu.com's printing and distribution services. I created the book, laid it out, the works. They only print and distribute. I got my book into every online retailer for less than $200.