Well, to quote The Cat from Allice in Wonderland: "That depends a good deal on where you want to get to."
IE - that is the goal of your "side business" ? Do you do it for friends and family or do you truly want to make a living from it?
I'm in the same situation, but am choosing to limit basement operations in favor of outsourcing.
My story vs. my plans....
I used to (even as recent at 10/4/08) did heat transfer from laser prints in my basement and been very happy, but very small. About 300 shirts a year from one customer and another 100 from other small runs.
HOW IT STARTED... In 2005 I explored t-shirts for a youth group my son and I belonged to. 100+ kids. CP & others were too expensive and required long lead times. Local print required longer lead times. I bought a Knight heatpress on eBay, some transfer paper from Airwaves (luckily I work 10 min from their warehouse) and t-shirts from a local logowear shop. Final product cost $1.50 tee + $.45 transfer = $1.95. I sold them from a table at an event for $10 and sold out all 100 shirts. They now automatically add $10 to all event registartions and everyone gets a shirt. For 2008-09 school year that would be about 400 shirts, or $3200 profit. I figure about 40+ hours of work. (Designing, printing, cutting, weeding, pressing.) $80/hr is nothing to sneeze at, but I want to expand this and this model isn't scalable.
MY PLANS.... I design, post to my website (not CP or others) and do target marketing to drive people to the website. Clients order and pay via PayPal. I would outsource printing and shipping. My goal is to sell to similar groups around the country. Shirts are bought online before they are even printed, so I'm not hunting down funds from someone across the country. I also spend 5 minutes customized the design for them with their name and or dates.
To compare recent order: 3 colors, 2 locations, white youth tee
Basement: $1.95 to produce & hand deliver for free = total cost $214.50. Revenue $1100 = $885.50 (8 hrs work = $110/hr)
Outsource: $1.50 for shirt + $3 for 3 colors/2 locations = $4.50 shirt. Free delivery = $495 - $1100 rev = $605 profit (1 hr work = $605/hr)
WHY GIVE UP THE PROFIT.... freedom of time and space. I can do all this from anywhere, don't have to spend all night doing it and can scale it to multiple clients. So, I focus on finding and keeping clients, let someone else be a t-shirt printing expert. FYI ... my inspriation is the book "The 4 Hour Work Week" where the author describes a similar plan for his nutritional suppliment. Take less profit (but still enough), own the business, but run it and use the money to finance your life.
Hope this helps.