Choosing your rate is always a tough one. I've done a lot of playing with rates over the last few years and found that for my freelance work $50/hour seems to attract the business I am looking for.

When I was working for $20/hour I only managed to get contracts you really wanted to avoid because of unreasonable requests, short-cuts on the work, etc... Basically the customers paying $20/hour were usually pretty cheap and it showed when trying to convince them of what they really needed.

I did a little playing with higher rates (There was a period that I was so busy at work I didn't really have time for consulting). My highest rate was $100/hour and I didn't get anything -> not that I expected to at that rate.

When choosing a rate, you need to make sure it's fair for all parties involved. For example, I make $27/hour in my day job with full medical benefits and 4 weeks paid vacation. So why should a consultant who doesn't get benefits or vacation pay make that. You should pretty much double the rate to accomodate for this ($50/hour). Most organizations know this and a reputable company will have no problem paying $50/hour (or a little more) for quality work.