Use Inkscape[1] and do it yourself. It's amazing what even a newbie can do with it in an hour or two. You can always pay someone to make a slicker version later, which will be much easier if you have something to use as a base.
I did the same, after two months of repeated failed attempts to hire someone to design a logo (one of the logo companies we hired sent us about a dozen horrible ideas plus the Verizon V-Cast logo, as though we wouldn't notice). I've since made two logos that I'm reasonably happy with, both using Inkscape. I'm not a designer, by any stretch, but the T-shirts we had printed up with this one look great:
And I made a logo for our example website (our product manages webservers and websites, so in our demo video we build a website from scratch and launch a useful application in a couple of minutes): http://doxfer.com/twiki/pub/Main/WebPreferences/logo.png
This one was whipped up in literally five minutes (once you know how to make the Web 2.0 "shiny" text thing, it's numbingly simple to do).
Neither are going to win awards, but they've allowed me to get on with work, and I'm not ashamed of them. When we take funding, or when we're making more money, I'll hire someone famously good to re-imagine our logo. Until then, I've been burned enough by bad anonymous logo shops.
One thing to keep in mind, that most non-designers (and even some designers) do wrong: Keep it simple. Imagine it in black and white. Imagine it on a T-shirt (and imagine paying for all of the colors you put in it--twice the colors is twice the price for printing), coffee mug, letterhead, and your website. Look at successful companies for inspiration, not just Web 2.0 companies (even if you're building a Web 2.0 app). You'll almost never go wrong by simplifying a logo design, but you'll certainly go wrong by putting too much crap in it. Also, pick your colors using a color scheme generator--not at random. Unless you've got the queer eye, you'll pick ugly colors. I guarantee it.
I concur. I went from never using inkscape to having a not horribly embarrassing logo in about 2 hours.
Learn how to use the gradient tool, it is key.
You can see what I did here: http://carhuntr.com/index.html
1. http://www.inkscape.org/