Back in 2005, we got a condo off of eBay for $299 for a week. It was a very nice place right by Disney. We were going to have a rental, anyway. Also, we carried in frozen gatorade and granola bars. I think it was about as cheaply as you can do Disney without going to timeshare presentations for free tickets.
Then, in 2007, we went with free dining. WHAT A DIFFERENCE! Don't underestimate the value of stopping to eat a decent meal and recharge the batteries.
Yes, I am sure we saved money, but we're now sold on staying onsite and getting dining.
Getting back to the saving money... The circumstances can be so different and make a big difference. If you have APs and you drive to WDW, you've eliminated two big costs (parking, renting a car) associated with staying offsite. However, if you fly to MCO, by the time you factor in a car, gas, parking, etc., it can really come out pretty close to staying onsite--except with onsite, you save yourself those hassles.
A lot of the UK folks come for 2-3 weeks, and I can see how you'd want a rental house or something for that time period. When you get to that level of accommodations, offsite is really going to beat Disney soundly in the $$ department.