I have rented a few apartments in Europe (Paris, Bruges, Amsterdam) through vrbo.com, and had mostly very favorable experiences. In all cases but one, the apartment met or exceeded my expectations...and they all cost a fraction of what I'd have paid at a decent hotel. One was a slight disappointment (smaller and more spartan that expected), but even that was mitigated by a fantastic location and rock-bottom price. My favorite was in Paris, where I got a full week in a cute little studio on Ile Saint-Louis for about the cost of two or three nights in a decent hotel - as a bonus, we had a small kitchen, laundry facilities, and a boulangerie just below us so I could wake each morning to the smell of baking bread.

One thing I always do is make sure there are several positive and diverse reviews. Of course, these could be fabricated by the owner, but I think that's less likely when they are diverse in terms of language and specific comments.

I suppose the day may come when I get to a place and am shocked that it's way below expectations...but by then I'll have saved so much that it'll be worth the cost to walk to the nearest decent hotel....