+1 on the friend idea, although there are things that you can miss because you're excited. I've done checklists and have gone over stuff, but you really need to divide an conquer. One friend looks for body work, rust, and VIN #s on body panels, and the other looks for leaks and mechanical issues. And of course, both drive it.
When my notchback was on eBay a while ago, a guy came and inspected it (he was affiliated with SGS, the company that does eBay inspections). Basically these are the people who are hired by dealerships to inspect leased vehicles and try to point out as many flaws as possible so that the dealer can low-ball the value of the car being returned to them.
He spent three hours going over every detail on the car, and documented every ding, nick in the paint, speck of dirt in the carpet, etc. in the (17 year old) car. He was even pulling back the trunk panels and taking pictures to look for rust (there wasn't any). It was a very thorough inspection for the $99 the prospective buyer paid. However, it was a huge inconvenience for me (the seller). Luckily I had the day off, but basically the whole thing was a pain in the butt. First, they tell you the date of the inspection, but don't give you a time. They call the morning of and tell you the inspector will call you between 8 and 10 AM. Well, the inspector called me at 10:30 to tell me he'd meet me at 12:30. He didn't show up until about 1:30, and then he spent three hours going over the car. So, basically I spent the entire day sitting around either waiting for a phone call, waiting for the inspector to show up, or waiting for the inspector to inspect the car. I don't know if I'd do all of that again to (potentially) sell a car that had a reserve of half of its true value. After all that waiting, the inspector was supposed to give me a printout of his assessment, but his printer was suddenly "broken."
When we sold our Saab, the seller wanted to have a pre-purchase inspection done. We dropped it off at her mechanic (in our town), they inspected it, and then we sold her the car. It wasn't much of a hassle at all, and it confirmed that we were selling a good car.
I can see both sides. Above a certain dollar amount, if the seller will agree to it, I think an inspection is a very good idea. I would pass on a car that the seller explicitly says he won't let the car being inspected. Chances are he's not hiding something, but had an experience like I had with the eBay inspector. However, IMHO, that's a chance not worth taking.
