M.O.
I see you got a lot of answers...so I will encourage you to look at my reply to a Dad's recent post about questions to ask babysitters. I laid out how we went about "interviewing" and then "breaking in" the sitters. I think that if you pay say $5 to start and then go up as the sitter does a good job that encourages the good ones to keep coming back. We pay our best sitter, $8 or slightly more per hour. She will serve pizza, cleans up completely, plays games with the kids and puts them to bed. If for any reason we expect more from her, we will up her rate for that occasion.
Personally, I would pay more for the care of an infant (diapers, feedings, needs more attention/care), holidays or if the sitter needed to fix meals or take the kids somewhere. I think each added responsibility should be compensated for...esp if you think you have a person who you can trust!
Our kids are 6 and 4 and we live outside of Chicago. She is college aged now, but we've used her for 4 years as needed. She isn't expected to cook or take the kids anywhere...it's just "sitting" while we go out for a date night.