The

tag shouldn't pose a problem.  So long as the <title>tags are different and the content of the page itself isn't the same, the similarity of <H1> tags on two pages won't substantially affect those page rankings.</p></title>

We can only speak from our experience, but we have had a similar setup on our site now for about 9 months and the effect that our main site's authority has on the blog seems to be slight.  I don't think that Google or anyone else sees our blog as a separate site altogether, but it does seem that they recognize that that portion of our site is a blog and the rest of our site is e-commerce and index our pages accordingly.

Additionally, because our blog discusses a much wider range of topics than just what we sell on the site, it seems logical that some of our site's authority might not carry over to the blog pages because the content is so different.

All of that being said, the effect of our blog has been very positive. It has increased our organic traffic and is a great way to add new content.

One quick opinion:

We have used a number of developers from eLance.com and have always been satisfied. As with any design project, the more information you are able to provide (in terms of what you want), the happier you will be with the finished product. Most designers will have a portfolio with samples of their previous work.

Prices will vary depending on the scope of the project, time frame, and how experienced/qualified the designer. You can get an idea of what people are paying for different projects by searching the job listings that other people have posted, and how much they are offering.

In our experience, eLance and similar sites are best when you know exactly what you want and the scope of the work is relatively small. Often times those developers are in different parts of the world and communication can be difficult (time zones, language barriers). For large, detail-intense projects, you might do better to find someone local or at least within the U.S. It might end up costing a bit more, but like Steve mentioned "you get what you pay for" and if you end up with a website that you don't like, the money you saved won't matter.