Q&A: work-at-home opportunities for parents?

Emily writes:

"So, here's my curiosity: There are seemingly a bazillion links to work for stay-at-home moms when you Google the subject. Does anyone have experience with sites that are legit? I've stayed at home with our 19-month-old from the beginning and have never considered anything else seriously, but, like a lot of people depending on one income, it sure would be nice to have some extra cash every now and again. I realize that stay-at-home opportunities run anywhere from simple web surfing/research to jobs needing a background (editing, for example, which is part of my work history), but I'd love to know if anyone has recommendations, probably on the simpler/more flexible end of things."

NOTE: I am going to police the comments section on this question heavily, so don't even think of spamming here.

Now to Emily's question. I've been WAH on and off for years, and in my experience, the best jobs you'll get are with people you've worked with in the past who know what you do well and are willing to pay you fairly for your skills. What that means is that the easiest and best way to get some work is to call your old coworkers and let them know that you're available to do any freelance version of whatever it is you used to do back before you were at home with your kids. They might not have anything for you immediately, but if they remember you and respect your work, they'll work you in.

Then your only problems will be figuring out how many hours a week you can realistically work, what you'll do with the kids while you're working, and how to structure yourself to make it make the most sense financially (should you become a sole proprietor and deduct your expenses? or just add it to "extra income" on your tax forms?).

Now, I'm not saying that there are no legitimate work-at-home gigs that parents can get that don't involve networking with former employers and coworkers. Just that at least you know you're dealing with actual companies that will pay you actual money for actual work if you go this route. Otherwise, you're going to end up chasing things that may or may not be scams.

Another route, of course, is to go into direct sales, usually with a multi-level marketing company. People have gotten badly burned by these opportunities, but there are also plenty of people who love doing it and make some extra money at the same time. The best way to weed out bad companies is to look at the way they pitch you (which is how you'll be expected to pitch people): If the emphasis is on selling the (unique) products, it's a model that can be maintained. If the emphasis is on building downline, it's a pyramid scheme, and you almost certainly are not getting in on one of the top levels. (FWIW, I know people who are happy selling Mary Kay, Tastefully Simple, Pampered Chef, Southern Living At Home, and Creative Memories. But bear in mind that you really need to like to sell and teach to do this.)

What else am I forgetting? There's money to be made on Ebay, if you can figure out what things will sell and obtain them at a low enough cost that you can make money even if everything you list doesn't sell for top price. At it makes plenty of sense to watch the job ads on Craigslist and any internet boards for your former industry and apply to anything that looks remotely like a fit for your skills and experience (be sure to keep your resume updated so you can send it out in a flash).

Does anyone else have good ideas of what to look for and what to avoid? I'm going to be policing looking for genuine spam, so no overt ads, please.