I have written this guide from my own personal experiences with ELM type interfaces. If you are reading this I am sure you know there are lots of sellers, both here in the UK and Far East, selling these devices very cheaply. Depending on your requirements buying one of these cheaper interfaces may not actually do the job.
The ELM327 is basically a PIC MCU (18fxxxx) burned with custom code to handle the protocol coversion between your cars ECU and computer. To prevent this code being read from the PIC and written to blank PIC MCU's the manufacturer will blow the CP fuses. This unfortunately didnt stop the hackers in the early release and the now outdated ELM 327 v1.0a was cloned. Most of these cheaper interfaces are based around using a cloned ELM chip hence the very low price (I bought one for under £25 delivered - a genuine ELM327 IC from most suppliers is arounf £12-25 for the IC alone!).
The problem being most people selling these interfaces on ebay claim they are the version 1.2, which is a lie. The PCB inside the casing actually has v1.2 written on it, but that refers to the PCB revision - NOT the ELM processor.
If unsure, ask the seller what the revision of the ELM IC is used. If you already own one you can find out by using hyperterminal and issuing the ATI command to the interface. The version 1.3 of the IC adds lots of features, can talk to a lot more vehicles, and has much better support for CAN based diagnostics.
So if you can buy the real thing - it might cost a little more but you are supporting the developers and you will get a much better designed product becuase of it. There has been a lot of discussion on mp3car.com forums about this - might be worth a read if you are looking into one of these devices