There are ways of paying less to get an application, developed than paying the going rate, but very often you get what you pay for - inexperienced developers who leave you with a mess of spaghetti code that's impossible to maintain, or experienced developers with whom you have to communicate across a cultural and language gap.
Developing an app like Twitterific is not easy. It's an extraordinarily polished app with a lot of attention to detail that most people - indeed many developers - would fail to notice or realize the effort behind. You may be able to get a Twitter iPhone client written for $3500 or $5000 by going offshore or by being willing to "work with inexperienced developers", but you're not going to get Twitterific for that, and it's doubtful you'd get even a halfway decent application for that amount.
And you likely will end up spending a lot of time managing the process, going back and forth on requirements, and fighting to get what you really want instead of what they want to give you.
There's also a risk with "cut-rate" development, whether it's offshore or just using inexperienced developers - you may very well end up with something you can't use, or something that gets 1 star ratings because it crashes or behaves erratically. You might find the occasional underpriced gem of a developer, but they won't stay underpriced for long given the sheer demand in this market right now.
By virtue of my books and blog, people often reach out to me when they need help with their iPhone applications. I get, on average, 4 or 5 inquiries a month from people asking for help fixing applications they had developed either over-seas or by inexperienced developers here in the States. In most cases, I end up having to tell them they'd be better off throwing their code out and starting over with a developer who knows what they're doing rather than trying to fix the code they bought on the cheap. If they insist on trying to "fix" what they have, I decline the work.