There's a much longer post here, but I may never have the several hours it needs in order to be written well. But since this is something that comes up pretty frequently, I thought it might be sort of interesting/useful to put out some quick and dirty comparisons between self-publishing and publishing with a traditional print publisher from the point of view of the creator.
(NB: I'm a publishing professional, so I'm not exactly the most disinterested party here. But I've tried to be as objective as I can. I'd be interested to hear if anyone spots me blithely revealing any egregious prejudices...)
THE PROS OF PUBLISHING YOUR BOOK WITH A TRADITIONAL PRINT PUBLISHER
Someone pays you (a royalty advance) right away, before you even sell a single book!
Services! You have people whose job it is to... edit, copyedit, proofread, project manage, budget and account for, design, print, warehouse, sell, distribute, market, and publicize your book.
Expertise! See above list. No matter how much of a go-getter/subject-matter-expert/hard worker you are, it's unlikely that you know as much about doing all of that stuff as the fifty people at your publisher who are working on your book. They're specialists, you have no choice but to be a generalist.
Moral support! You're not doing this alone. You are now the business partner of a company who has a strong incentive to want your book to succeed. This is a business advantage, but it also is pretty nice to know you're not alone in this crazy mixed-up business of giving birth to a book.
Shared risk! Guess what! If your publisher pays you an advance and then fails to sell more than 500 copies of your book, leaving 9,500 in the warehouse, who eats that loss? Your publisher! The only financial toll it takes on you is the fact that you will never earn a cent in royalties over the amount of your advance (already paid) and the fact that you may find it harder getting a second book deal. This is not an inconsiderable risk, however, which leads us to:
THE PROS OF SELF-PUBLISHING
Your profits are your own! No more piddling royalties for you - you keep all the money earned by your book.
Business independence! You have ideas about where and how your book should be sold. You have ideas about how much it should cost and whether it should be in hardcover or paperback. Guess what: these choices are all entirely in your hands! Nobody is going to tell you what to do.
Creative independence! You have ideas about what your book should look like and how the plot should go. Without a publisher, the creative life of your book is entirely in your hands. You can retain the services of an outside editor, sure, but you definitely don't have to do what they say. Ditto design and art issues.
Self-reliance and community support! You don't need to worry about your project competing for attention with the 25 - 1000 other books that a publishing house is pumping out. You can baby your book all you want - after all, you're a publishing house with a publication list of one. Plus! If you succeed with your self-publishing venture it will be in large part because you (and you alone) have found and built an audience that has chosen to support you personally. That's pretty powerful.
Contained risk! If this venture goes belly-up and you're stuck with a financial disaster on your hands, the good news is, you've burned no bridges. You have soured no future deals. The loss is yours and yours alone, and will not change your chances (for the better or worse) of getting a future deal with a print publisher, if you decide to try that. It's also probably only going to improve your chances of succeeding in future self-publishing efforts, presuming you can learn from your mistakes.