Blinksale
I do some consulting work and was advised to look at Blinksale to manage invoicing. It’s free for up to 3 invoices a month, and pretty inexpensive for more than that ($12/month for 50 invoices up to $49/month for 1500 invoices).
The UI is slick, very Web 2.0 (it’s got Ajax AND tags 😉 )
They’ve done a great job taking the hassle out of invoicing.