So, lets talk about finding an Agent. Like everything else in the writing world, this too is filled with scams. Keep Mr. Yog in mind, if the money is moving in the wrong direction (i.e. away from you) it's time to go running away.
For example: Reading fees, reputable agents don't charge them. They may want to, and I get that, because they have to read a whole lot of stuff to find the good bits and it would be nice to be paid for their time. However, a whole bunch of scammers noticed that authors are willing to toss money around like a man with a mid-life crisis trying to impress nubile blond girls, and opened up businesses that did nothing but charge reading fees. So to distinguish themselves, the real guys don't charge them.
If an Agent is hot for you but wants you to spend money on an editor, or research fees, or placement fees, or writing workshops, or anything other than what you already spent getting his attention, it's time to find another Agent.
From what I can find there's basically only one legitimate expense an Agent will ask you to incur, and that's the cost of sending them a pile of your manuscripts so they can be shopped around. Which, if you're like me and you wrote War and Peace II: This Time It's Even Longer!, that might be a real expense. Otherwise, they should not be asking you to shell out money.
The job of the Agent is to get you money. He goes out and gets a publisher to buy your book. Then you, and the Agent get paid by you selling copies of the book. Agents seem to get 10 to 15% of what you make. When you think about how much work they do for this money it's rather staggering. Supposedly Jane Average Writer will sell 3,000 copies of her book. If she makes 2.00 a copy, then Joe Agent will make .20 a copy. At 3,000 copies Joe Agent just made $600.00. He's doing how many hours of work for you for $600.00? If Joe can sell your book, Joe is a bargain. (We're not going to talk about how much work you did for the remaining $5,400.00.)
So, because of the work they do, and how little they get paid, it make sense to be kind to Joe and his readers and only query Agents who will actually be interested in your project. Nothing will get you rejected faster than sending out a "Dear Every Agent in the Western Hemisphere" letter. Joe's time is valuable. If Joe represents Christian Themed Cookbook writers, please do not send him a letter about how great your new Dresden Files meets the X-Files mystery thriller is. You've just wasted Joe's time and the cost of your stamp.
Go find five books you think are pretty similar to yours. Now, go find out who their agents were. That's where the hunt begins. Hopefully said agents have websites and blogs that will tell you exactly how they want you to send them things. Pay attention to what they have to say on those blogs. Tailor your letter to their specs. You want Joe Agent's reader to know you did your homework and were paying attention when you picked him.
Once you've gotten those first five agents, and mailed out query letters to them, go find another five. Keep doing this. Every time you get a "Dear Writer... We are sorry to say..." letter, send a new query out. If you've cleared out the library of every book even remotely similar to yours, then it's time to invest in Publishers Weekly's or Writer's Market, etc... There are lots of agents out there, and eventually you'll find the right one. (Though after five or ten rejections it might be worth while to rework your query letter.)
Why not start with Publisher's Weekly or Writer's Market? This is just a matter of personal preference for me. It comes down to this, anyone with money can advertise. An actual published book in your hands tells you that Agent was able to sell the book. A bunch of books is even better. On top of that, with the book in your hand you can check with it's Author, did she like her Agent? How well did the Agent do his job? What kind of contract did the Author get? How long did it take?
Once you get a letter back saying please send us more information we're interested, it's time to do more research. Before you sign a contract head over to Absolute Write and look the agent up. Or get on the discussion board and ask around. In addition to scams, there are Agents who just aren't very good. Time to put your feelers out into writer land and see what the others think about the person who just offered you a contract.
Of course, that's the fun part compared to what we'll talk about next: The Dread Query Letter!