I cannot stress enough the importance of finding someone who understands YOUR needs and is prepared to go the extra mile to help YOU in any way they can. That is more important than location, money, time and all the rest of the points made here.
Some guys are only interested in churning out quantity rather than quality. Whether they charge by the hour or charge by the song it does not matter. The important thing is to give you the service you need at a price you can afford. Communication is the key. Many bad demos are produced and much time wasted because the explanation of what exactly was wanted or expected was not fully discussed, understood or explained. It is sometimes better to use a studio where you can meet face to face and provide input along the way rather than phone or email but it all boils down to what works for you and the end results produced. One of these days I might send something to a Nashville studio just to see JUST how good they really are but in the meantime I am happy with the team I have right now. They provide a complete service from rough demo to full production including mastering. They cater for any genre, style and budget and the guys are pretty good at multi tasking like laying down parts and help with arranging etc. NOTHING is too much.....not just pros but good buddies as well.

http://www.soundclick.com/bands/songInfo.cfm?bandID=687727&songID=5238055