thanks for quick replies! i wasn't clear earlier - my friend is employed by US company in NYC (thus the H1), but is currently on leave in india (to visit family) and will return to ny to work before going to russia in april with me. If there is advantage to doing visa in india, then there's an opportunity to do so. i think she'll be accepted by NY consulates, since she has an address in nyc and several years of tax returns and other docs with life here.

I'm all too aware of russian officialdom, having lived there most of my life. Unfortunately, i don't have any family there to ask and knowing how painful it is, i want to avoid asking friends to do the invitation.

I checked out the website - i'm still unclear if it's perfectly legal and if interrogated will it hold up, or are you just skating by on hopeful disinterest of officials? it sounds too easy - although i won't complain if that's all we have to do.
Off topic - i don't understand why they keep the old soviet paranoid laws now? it only discourages tourism and the big, bad american spies will get in anyway! and $100 for 1 month max visa is ridiculous for the level of country. yes, they are getting back at US for making it difficult for russians to enter, but still. For my $100 i got a 5 year multi entry visa to Brazil!
nothing is easy in russia... i've been looking into selling my apartment there, and it seems close to impossible, especially getting the money out of the country without carrying it in a briefcase! arghh...ok, rant over.