Note: There is a much better, up-to-date blog from Holly on this topic, 15 Stock Photo Resources.
Stock photography is an excellent resource to designers because we don’t always have the time or outlets to take our own pictures or hire a photographer. When I was just beginning as a designer and visiting these stock photography websites, I could not understand why royalty-free photos were not actually free of charge. I finally had to research the meaning and discovered that you still have to pay the price of the picture, but it’s only a one time fee. After you pay, you are able to use the photo multiple times, hence free of royalties (although there are still restrictions for non-commercial use, etc.), as opposed to the “Rights-Managed Licensed” photos where you are basically paying the person who took it and you pay every time you use the picture. The Rights Managed photos do allow for a much larger print though.
At the moment, I have a membership with iStockphoto which gives a relatively good selection of royalty-free photos, vector illustrations, and royalty-free videos for a reasonable price. A low-resolution image for websites costs $1-$3, as opposed to a royalty-free image on Jupiterimages.com, close to the same size, can cost about $100. It just depends on the quality and selection of photos you need.
www.jupiterimages.com is a good source for more professional-looking photos with an enormous selection
www.istockphoto.com is a better source for cheaper photos with a decent selection.