You need to do both hard and soft marketing - hard are ads you pay for, soft are networking things your talking about. It's a mix of both that is most powerful.

For instance, banner ads and PPC will represent a lot more newcomers to the mud because of the volume of reachable people - the more budget, the more people you reach like this, so the limit is only on how much money you can raise - not on how many volunteer hours people put in. Money is an infinite resource, time is not.

That said, your HARD activities always work better in conjunction with SOFT activities.

I did a post a while back on hard and soft marketing. Check it out here:
http://forums.carrionfields.com/dc/dcboard.php?az=show_mesg&forum=6&topic_id=16310&mesg_id=16310&listing_type=search