We have a live-out nanny. I live in Central FL, about 25mi from Daytona. What you pay depends a lot on where you live. I advertised for a part time nanny, 25hrs per week, $225 weekly (which works out to $9/hr). I was worried that I wouldn't get any responses, so I put in my ad that if she needed to, the nanny could bring one of her children with her, providing, of course, she was capable of handling both children competently (this may also be something you can do to maybe lower your cost some). I needn't have worried - I had too many responses to my ad to even call them all back - and many of them didn't even have a child they needed to bring, so it wasn't that part of my ad that got so many women to call.
After I hired someone, my husband had to go out of town to work, and since I also work full-time from home, I asked her to stay full-time, 40hrs/wk. I pay her the same hourly rate, but of course for the full week now, $360. We have a pretty good relationship (she's been with us about 5mos now), and she is very reliable, so I don't deduct if she needs to take her son to the Dr, for example. So I guess you could say, it's more of a salary arrangement.
Some things to talk about in advance (things I forgot to talk about, but we've worked them out): Whether she'll be paid for things like Dr's appts, holidays, or your vacation time, whether she will have any paid vacation. I do pay our nanny for holidays and give her them off if I have it off and paid, and when we took vacation to go see my husband who is still working out of town, I made a deal with her and gave her tasks to do around the house here for one week while I was gone, so she could still earn her salary, then gave her the second week off and paid also (as her vacation). But if you have someone less easygoing, and you don't iron out these subjects in advance, I can see how that might be an issue ("I didn't hire on to be a housekeeper!", KWIM?).
Of course, for a similar arrangement, it would have to be someone you really trust. I am lucky in that I can observe her personally and interacting with my daughter since I work here in the home, so I was more comfortable with trusting her since I'd been able to "see her in action" so-to-speak. Basically, I try to treat her how I like to be treated in a job, and it's paid off for us.
If you can, try to spend at least a week or two at home with her and your child so you can observe her and show her your routines. That will also ease the transition for your child.
Depending on your situation and where you live, you may want to do things like background checks, and drug screening (they have those kits at the drugstore). Sometimes you can even just ask at the interview if they're comfortable with those things, and judge if you even want to give it a shot based on their response.
Also, if you work (or your husband does), see if your company offers a dependant care reimbursement account - it's a great way to save on your payroll taxes for the money you pay the nanny (it's deducted pre-tax out of your paycheck). This also works for daycare facilities, too. I have a DCA, and I love it!
Good luck, and email me if you have any other questions.