You certainly can hand-solder down to "0402" parts with strand solder and a suitably narrow chisel bit: apply flux, place part, get a pad-sized bead of solder on the iron, apply to one end of part while holding part with tweezers, dab more solder on iron, do the other end.
A head-mounted magnifier will help you see what you're doing at that scale.
The next stage of neatness is to hand-apply solder paste to the pads before putting the parts on. The paste is slightly sticky and includes flux, so you get better joints and less risk of the part pinging off never to be seen again.
If your run is more than a few, get a solder paste mask made which turns applying paste into a single action: align a panel of PCBs, wipe paste across, remove.
Once you're using paste you can consider reflow. Reflowing both sides (one after the other, not both at once!) can be fiddly as you need to make sure the components on the bottom don't fall off.
The next stage is to go pick-and-place; there are people doing cottage-industry or homebrew pick-and-place, sometimes with secondhand equipment. The actual soldering is still pastemask and reflow oven.
The final stage is to buy the fully automated line as a single unit: boards go in one end, component reels in the side, finished boards come out the end with automatic inspection. Worth it if you can keep it busy.
I've also seen partial wave soldering used to add TH parts to SMT boards. This involved extra production jigs to hold the TH parts in place and shield areas of the board from wave soldering.
From my experience, one-off assembly is extremely expensive in the US. Most places would not even bother giving me a quote for a single piece. Furthermore, you're likely to have the same problem with building a breakout board, since that will have to be assembled (it just displaces the problem). However, I have found that (with some work), it is possible to do BGA parts if you have access to a reflow oven, or if you have access to a fairly good heat-gun.
For heat gun instructions: http://devbisme.webfactional.com/blogs/devbisme/2012/08/24/mounting-bga-pcb-quickly-and-cheaply
For a reflow oven:
I used #186 rosin flux at 295 C for 90 seconds with a 200 C preheat (180 seconds). This is higher than most manufacturers recommend, but the oven I have access to was donated to the University and is from the early 90s, so it doesn't actually get that hot. It was not necessary for me to use a stencil or even apply any solder paste, I simply coated the footprint area with flux and carefully aligned the package to the silkscreen.
One bit of layout advice if you do not have access to an oven is to make the board as small as possible. This makes it possible to heat up the entire board to a consistent temperature.
Also remember to tent vias under the BGA, if you do not, capillary action will cause the solder to flow from the balls into the vias, which is not what you want to do. http://siliconexposed.blogspot.com/2012/07/bga-process-notes.html
Finally, if you don't have access to x-ray inspection, make sure your silkscreen outline is precise. It should be slightly bigger than the package to assist you in aligning the part. You can print out the silkscreen layer in Eagle on a conventional laser printer with 1:1 scale to make sure you can align it on paper first.
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Heres a vid I made on reflowing a QFN without hot air http://www.youtube.com/watch?v=d-f-SBC0GrU