PCB Prototyping and Fabrication
Here is what I do:


use Eagle to design my schematics and PCBs,
order PCBs from iteadstudio (google them), I typically get them in about two weeks, and the prices are unbeatable (I end up with PCBs costing about $1.40 each). Follow their instructions, pay special attention to downloading their DRC rules (so that Eagle can check your board) and their CAM job (so that you can export Gerber files),
apply solder paste (leaded) with a syringe (stencils are too expensive),
manually place components using tweezers,
either use a home-made reflow oven or simply heat the board with my hot air soldering station if the board is really tiny (no nozzle, I use a timer, and I preheat slowly).


I routinely use QFN packages and 0603 components, no serious issues. Easy to do with a loupe and a steady hand. Sometimes if you apply too much solder paste you'll short two QFN pins together, but that is easily detected and corrected with a hot air station.

I find the above process much easier and more pleasant than trying to manually solder SMD components.

All in all, I'm quite happy with the process. The only downside is the ~2 week waiting time for PCBs, but you can mitigate that by staging projects, so that you always work on 2-3 at a time.

Also, I found that you can really do a lot with a hot-air station. Boards up to 3x3cm can be reflowed using hot air with no serious problems for amateur purposes. I use the oven for larger 5x5 or 5x10 boards only.

For very quick one-off breakouts I'll often whip up a 2.5cm x 2.5cm one-sided board in Eagle, print it on photo paper, transfer to a PCB using an iron and etch. It's about an hour of hard work (peeling away the paper is especially troublesome), but I can experiment with that I2C accelerometer in one hour, instead of two weeks :-)