I just wanted to relate my experience on this. After reading the posts here on the subject, I decided to try and apply for Russian visas without using a professional service. Our hotel (Radisson in St. Petersburg) provided the necessary invitation and voucher and I followed all the directions on the Consulate site. There were a lot of them, but they were very thorough. Our passports came back 2 weeks later with all the visas and the entry documents.

Yes, it's a pain and it's unfortunate that the regulations and the expense discourage people from visiting a country that badly needs tourist dollars- but at least the process worked. Compare that to my rant on Brazil (see the thread on Brazilian visas) where the Consulate was no help at all.