Victor Keegan discusses self-publishing in an article on Guardian Online. His main thesis is that “If the invention of the printing press liberated books from the monopoly of the monasteries in the 15th century, then self-publishing is freeing us today from the power of publishers.”
The term vanity publishing is misleading. Today there are several viable options for either bypassing publishers or collaborating with them on completely new terms. These create opportunities for small obscure titles to be printed and sold in addition to creating original and personalised gifts.
Everything depends upon the level of service you desire. Handling everything from content, layout and marketing creates very cheap books but these books may be difficult for general readers to find but will provide a viable and important option for alternative publishing.