Further Wikipedia information on Vanity Presses

Differences from commercial publishers
The term “vanity press” is generally derogatory, and is often used to imply that an author using such a service is only publishing out of vanity, and that his or her work could not be commercially successful. Some vanity presses are in fact scams, including those identified at the Science Fiction and Fantasy Writers of America (SFWA) website. In general, any publisher that expects the author to pay a large fee upfront (while promising or hinting at fame and fortune), is most likely dishonest, and certainly should be approached warily.
Some companies offer printing (and perhaps limited distribution) for a fee. If honest, such companies will explain their fees, what they do and do not offer, and how their service differs from that of a commercial publisher. Such services can be a viable way for an author to self-publish without owning printing equipment. This is particularly attractive to an author of a work with a limited, specialized appeal which may not interest mainstream publishers, or to the author who intends to promote his or her work personally. However, the true distinction between vanity publishing and self-publishing is simple: who owns the books when they come off the printing press? If the answer is the printer, who then pays royalties to the author on the basis of books sold, then the book has been vanity published. If the author owns the books outright, and can thus dispose of them as he or she likes, then that author has self-published.
Scholarly journals often ask authors to pay page charges but use peer review to keep a high scientific standard. Poets often self-publish, as their work is generally of extremely specialized appeal, and therefore risky to mainstream publishers.
A mainstream publisher traditionally assumes the risk of publication and production costs, selects the works to be published, edits the author's text, and provides for marketing and distribution, provides the ISBN and satisfies whatever legal deposit and copyright registration formalities are required. Such a publisher normally pays the author a fee, called an advance, for the right to publish the author's work; and further payments, called royalties, based on the sales of the work. This led to James D. Macdonald's famous dictum, "Money should always flow toward the author" (sometimes called Yog's Law).
A vanity publisher typically fails to provide any useful editing service, and is not selective, printing works by anyone willing to pay a fee. This lack of selectivity is the main reason for the low esteem in which most of the literary world holds vanity publishers. Many vanity publishers charge excessive fees, which are never likely to be recouped from sales of the books involved. Vanity publishers typically do little or no effective marketing. Formerly they did little or no distribution. Now vanity publishers may offer web-based sales, or make a book available via online booksellers, but they generally do no marketing. Furthermore, many bookstores -- especially large chain stores -- avoid self-published books.

Business model
Vanity publishers typically offer contracts that strongly favor the publisher, charging high fees while providing low-quality books. They often sell worthless add-on services related to editing and marketing, and are frequently charged with outright scams.
A self-publisher is an author who also undertakes the functions of a publisher for his or her own book. The classic "self-publisher" writes, edits, markets and promotes the book themselves, relying on a printer only for actual printing and binding. More recently, companies have offered their services to act as a sort of agent between the writer and a small printing operation. In these cases, the distiction between self-publishing and vanity publishing is less obvious than it once was.
Many PODs (print on demand companies) using modern digital copy machines are the most recent incarnations of vanity presses. Some have turned to scamming authors in order to keep their machines busy and to help pay for them. During the first years of the 21st century the mainstream printing business went into a slump and the gross oversupply of digital printing machines (like big Xerography machines with add-on units to bind books) forced traditional printers as well as the new print on demand companies to seek new sources of revenue.
Vanity presses earn their money, not from sales of books to readers like other publishers, but from sales of books to the authors. The author receives the shipment of books and may attempt to resell them through whatever channels are available. In some cases, the copies are not even bound.

Alternatives to vanity publishing
Writers considering self-publishing often also consider directly hiring a printer. According to self-publisher and poet Peter Finch, vanity presses charge higher premiums and create a risk that an author who has published with a vanity press will have more difficulty working with a respectable publisher in the future.
Some PODs (print on demand companies) using modern digital copy machines have chosen to act as printers and sellers of support services for authors interested in self-publishing. Such firms are typically marked by clear contract terms, lack of excessive fees, retail prices comparable to those from commercial printers, lack of pressure to purchase "extra" services, contracts which do not claim exclusive rights to the work being published (though one would be hard pressed to find a legitimate publisher willing to put out a competing edition, making non-exclusivity meaningless), and honest indications of what services they will and won't provide, and what results the author may reasonably expect. The distinction between these firms and vanity presses is essentially trivial, though a source of great confusion as the low fees have attracted tens of thousands of authors who wish to avoid the stigma of vanity publishing while doing just that.

Libraries
The typical library avoids stocking self-published books, since most vanity publications have not gone through selection, revision, copyediting and other critical steps which are normal for commercial for-profit publishers. Most libraries will not accept such vanity publications, even when they are offered free of charge, since even then there are costs involved: all library books have to be described in a catalogue, and require classification stickers and other elements. The total cost of cataloguing and general processing in 2002 was about $50 per book in the United States regardless of the size or original cost of the book. Then, the cost of keeping the book on the shelves has to be added, each year. In any case, it is usual for books to be chosen for a library by the application of a collection development policy designed to meet the needs of a particular user community, and vanity publications only rarely meet those needs.
On the rare occasions when libraries accept the product of a vanity press, they usually require the donor to sign a form giving to the library the right to do what it pleases with the item. The item is sometimes then disposed of in a yearly book sale or by some other process for the distribution of unwanted items.
Exceptions include local histories, which are of specialized interest enough to be uninteresting to commercial publishers but which are sought out by libraries.
Many libraries and reviewers do not clearly distinguish between vanity publications and self-publications, and are apt to decline or resist any book that does not come from a commercial press. Indeed in some cases any book produced using POD technology encounters such resistance, even if it is from a small commercial publisher.

Vanity presses in fiction
Umberto Eco's novel Foucault's Pendulum discusses the inside workings of a vanity press publishing company. Elaine Viets's novel Murder Between the Covers involves a self-published author attempting to set up a bookstore signing. The hero of Jonathan Coe's novel What a Carve-Up is commissioned over a long period to write a book by an otherwise vanity publisher. The company is satirized at some length.

Some vanity presses
American Biographical Institute (see Scams Page, CAV, below)
American Literary Press, Inc.
AuthorHouse (formerly 1st Books Library)
Booksurge (formerly GreatUnpublished.com)
Dorrance
iUniverse
Poetry.com, aka The International Library of Poetry
PublishAmerica
Lulu.com
Melrose Press (aff. International Biographical Centre, Cambridge)
SterlingHouse Publisher
Trafford Publishing
Vantage Press
Watermark Press
Xlibris - a notable Print-On-Demand provider of assisted self-publishing services

See