What is the most cost effective way to exchange USD for Litecoin? Also, what risks are involved? Do the service(s) have a long track record?
You could try looking for someone to trade you USD for litecoins in your local area in person, through Bitcoin OTC Exchange, or perhaps BTC-E or some other online exchanges.

In the first case the risk should be fairly small, although it might take a long time to find someone, get in contact with them and so forth. Not to mention the exchange rate might not be in your favour.

The second option should give you better results, but you'd have to make sure you are dealing with someone reputable enough for your trade. However, finding an exchange rate in your favour might not be too easy.

Third option is probably the safest and the exchange rate should be reasonable. The main problem you might face with established exchanges is possibly having to register on them with your documents to avoid your account and funds being suspended due to Anti-Money Laundering laws and regulations.