Vanity publishing is a term used to describe the process of paying a publisher to publish your book. To a career writer who is making a living from selling their work, this method of publishing is generally unacceptable. After all, writers are in the business of selling their work, not paying to have it published. If you're interested in having a few copies of a book made for your own use (see this article for more details), this can be a valid publishing methods for your publishing wants and needs. However, when a publisher attempts to find writers to publish using this method against their better options, it becomes a problem.
"Bad" publishers often prey on new writers who are excited to get their work published and are looking for an easy out. Getting your book to print can be a lot of work. Researching agents and editors is time-consuming, and mailing multiple letters and manuscripts can be costly. These bad boys are hoping that by enticing you with bells and whistles you'll opt for the quick and easy route rather than spending the time waiting for a phone call. They are often right.
Most of the time, these scammers are promising services and results they are not really providing and cannot truly guarantee. They may state that your book will be edited and reviewed, when what they're really doing is running it through a spell-check and writing a summary for a quickie news release. They may claim you will sell X number of books through ABC type markets, when they really can't control whether or not book buyers will make that purchase.
So which companies are legitimate and which are out to get you? With these criteria one might suggest that iUniverse, the publisher associated with Barnes & Noble, is a vanity publisher running a scam. After all, you'll pay a minimum of $299 to get published - $499 if you want to see the books for sale to more than just your mother. One of the differences here is that iUniverse does not need to pre-accept your book, offers a large selection of services, and it puts much of the responsibility for quality assurance back in your hands.
In and of itself, the services a book publisher offers are not bad. However in the publishing world there are options considered to be more favorable and more acceptable. If a publisher wants to charge a writer to have their book published, that doesn't independently mean they are running a scam. After all, that is what printers do - the same printers where you might get business cards or wedding invitations printed. Keep in mind though, that you have options. Which option you choose will depend on your reasons and goals for publishing your work.