Protecting yourself as a freelancer
As an independent designer / developer of any kind you need to look out for yourself. Whether someone is actively trying to swindle you, or just conducts business in a haphazard way, you need to be prepared. Following some simple tips can make the difference between getting paid and having a freelance job fall apart.
Tip #1: Keep good notes. Specifically, save the text of the job ad after you apply for something. That way you can quickly refer back to the ad if necessary (e.g. the person calls you, or they refer back to something in the ad). Bookmarking the ad isn't enough because the person can go back and change the text of the ad or remove it. For example: I once had someone tell me that their ad said that the pay rate was $15/hour, but when I went back to the ad it did not list any pay rate. Keeping good records is a necessary step to protecting yourself.
Tip #2: Draw up a contract. This is probably the strongest step you can take to protect yourself. If you make up a solid contract (number of hours, service performed, pay rate, conditions for repayment, etc.) there is greatly reduced chance that either party will break the contract and open themselves to litigation. And yes, email contracts are binding in most cases (have you ever clicked "I Accept" to a license agreement when installing software? same idea). To learn more about contracts and repayment see the how to get paid and how to write a contract articles for more information.
Tip #3: Don't hand over the goods until you get paid. Unless you have a strong working relationship with someone (long-time client), you should be cautious of showing your work in a state that lets the other person download it and use it without repaying you. Instead of presenting your source files you can use screenshots, mockups, rough drafts, etc. My favorite service to use for showing a client web design work is BrowserShots, which takes screenshots of your website on various platforms and hosts the screenshots for you (completely free).
Stay safe!