There’s a post over on Mike’s blog about various solutions for minis in D&D, particularly when you don’t have enough minis to go around. I must admit that some of these solutions took me by surprise, particularly using Scrabble tiles for minions and such.
Minis are an interesting problem in D&D. The game is clearly built for them, and is better when you use a tactical map of some sort along with minis or counters. The official D&D minis are pretty high quality and are already painted, but it can be expensive to get the exact minis you need, and storage is an issue, as well.
I have a pretty small collection of minis, and I tend to save my minis for the big important villains and monsters that I want to draw extra attention to.
For the rest, I put together a Photoshop file full of custom-made counters with images that I scour from the web, or from PDFs of various books I have. I print these out on card stock for extra sturdiness and weight. Since I use this method for initiative tracking, I make sure that the images on the counters match up with the images on the initiative cards, so the players can easily reference who is where and what conditions are on which creatures.
In addition, the players each have their own mini. Most encounters feature the player minis and a bunch of card stock counters, which has the advantage of allowing the PCs to stand out and be easy to find. Like I said, major villains usually have a mini devoted to them, as do large brutes or elite meat shields that I want to draw attention to.
This method tends to work pretty well, allows me to use a lot of evocative art, and is cost-effective.