When I dug into this when I was setting up, my understanding was that, in Delaware, there is established case law dealing with multiple shareholders that investors really like. But in Nevada, privacy laws are supposedly stronger (I believe they don't share corporate info with the IRS) and it is advertised that Nevada courts are less likely to pierce the corporate veil. A recent googling just turned up this counter-argument to that (http://www.youngentrepreneur.com/forum/f2-general-business/d...) so YMMV.
I believe the costs are pretty comparable if you're an out-of-stater: You'll get hit with annual registration fees (slightly higher in Nevada, I believe) and the need for a registered agent in either location, but you'll get hit with a franchise tax in Delaware (not sure if it offsets the Nevada registration fee off the top of my head). Either way, if you're not operating in Nevada or Delaware, the state in which your business is operating is going to want taxes, so it doesn't really help in that regard. (And, as an aside, if you're in California, taxes really suck).
I believe the costs are pretty comparable if you're an out-of-stater: You'll get hit with annual registration fees (slightly higher in Nevada, I believe) and the need for a registered agent in either location, but you'll get hit with a franchise tax in Delaware (not sure if it offsets the Nevada registration fee off the top of my head). Either way, if you're not operating in Nevada or Delaware, the state in which your business is operating is going to want taxes, so it doesn't really help in that regard. (And, as an aside, if you're in California, taxes really suck).