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Despite the dramatic changes that have taken place over the past few years, Russia is not a free country. At no time will that be more apparant than when you deal with officialdom. Compared to most other countries', Russian visas are expensive, inconvienent, and difficult to obtain.
The main problem with the standard tourist visa is that it is based on sponsorship. That means that, before your visa is issued, your whereabouts have to be accounted for for each night's stay in the country. Your either have to know someone in Russia who can write you a sponsorship letter, or have hotel bookings for your entire stay. If money isn't an issue, neither are the bookings. Simply contact Intourist, put down deposits for whatever outrageously overpriced hotel you choose, and they will issue you a letter that will get you a visa.
Although Intourist isn't the only way to book accommodation nowdays, few other avenues are available to Westerners. A few savy travel agents may provide some help. But, as any budget traveler knows, it's almost impossible to book the affordable places through a travel agent.
There is a way to escape the pre-booking requirement, with a business visa. It allows you travel free of prior restraints. It does, however come with a cost. To begin with, it is more expensive. But more importantly, it is only quasi-legal. If you're not traveling on legitimate business, I wouldn't recommend it if you're faint of heart.
A business visa is easy enough to obtain. As with anything Russian, you only have to have the cash. There are sources in the U.S. that can arrange it for you. The problem is that visas are supposed to be validated by the sponsor. If you are issued a visa by a dummy company, you won't get it validated, and it could cause you problems. I was lucky and went through airport security without a word, you might have a different experience.
Good Luck.
This company, GetRussian contacted me and said they can arrange visas. I haven't used them myself, but the claims seem credible. They're at least a good starting point.
Comments and suggestions welcome.
Mail me at kwest@ego.net