I think this thread can be of great value to budding authors and seasoned writers alike.
I have experience on both sides of the fence, having worked with writers to get work published in the past.
In my experience, most first time authors are just happy to get their work in print, and seem to forget about the financial side of the deal with a publisher. They may also find themselves being tied to a 'next book clause' and very low loyalties for their efforts.
There are a fair few issues to tackle that have been mentioned already, so I will address a couple of them.
The most important thing is to find a publisher that you are comfortable with. All will make promises, but I would advocate actually trying to contact published authors in their stable to ask their opinions. The publisher may furnish you with a list and be happy to help in this area. I would be wary of those who are not so forthcoming. In short, do your research on the publishing firm. You want the process to be as enjoyable as possible and crucially, the end product to be something you are proud of, rather than one of regrets of what it could have been. You must look at their back catalogue, assess their house style and the quality of their output. There are big differences between the output of different firms in terms of quality.
Royalties - these vary enormously and if the author is not careful, they may find themselves tied to a contract that yields very little financially, even if the book is successful. It surprises me that no author asks for a banded royalty rate based on sales. So, the more the publisher sells, the more the author benefits. A publishing firm will certainly not offer this as a matter of course. I cannot stress enough the importance of getting the opinions of other authors (if they are forthcoming). You will be in a stronger position to negotitate better terms armed with some industry knowledge.
Free copies - it is only fair that the publishers gives their authors free copies as part of the deal. This is commonplace and is only courteous. Personally, if a publisher does not give a few free copies, then it tells me a lot about that firm.
Editorial control - this is a thorny issue as I have seen the other side of the fence, with authors severely delaying the process by wanting to make continual minor' last minute' changes. There is a balance between getting the book right and delaying the whole project. On saying that, a good publisher should work with the author to create something both can stand behind. This will involve mutually agreed deadlines for changes and additions to keep the project intact. I have found that some authors have a very clear and defined vision and turn up with something that is like a final proof. Other needs much more guidance.
Formats - some publishers will have set parameters for their books. For example, it must be 224 pages, with 120 images etc etc. This is for economic reasons with paginations, as well as their firm belief that this format works. Experience has told me that one model does not fit all. Try and find this out information before you partner up with the firm as you certainly do not want to see your 300 page book butchered into fitting their model.
I am sure I have missed some of the points covered, but to conclude, I cannot stress enough the need for authors & budding authors alike to actually talk to each another, rather than accept the first offer that comes from a publisher.