Cheap and reliable XBee alternate?

Hi everyone,

I am currently developing a project that require a cheap and reliable wireless connection. I know that there is XBee, but it is a bit expensive ($20 off mouser). and that it is not compact.
I am looking for a cheap and reliable wireless system, preferably a SMD (TQFP) style chip that I can integrate onto a PCB. It seems a bit tough to find. Digikey has a wide range of chips in the wireless category, but I have no idea what I should be looking for and what is good and what is not.

I want to ask the general community if anyone has used another form of wireless system and had good experience with it. (I've used Nordic before, and I can only say that it is absolutely horrible. The connection quality is just unbearably terrible).

Thank You
Any feedback is appreciated.

its not the chip its everything that goes with it, including the antenna

I am currently developing a project that require a cheap and reliable wireless connection.

No such thing. It's either cheap OR reliable.

"I am currently developing a project that require a cheap and reliable wireless connection."

Hard to answer without more info.
What range? What data rate? One-way or two-way comms?

Thank you for the replies (better than none ;])
Ok here are some concise info:
I don't need high data speed. Even a 4800 bps link will do.
The range I am looking for is around 100ft indoors.
I am looking for a two way comms.
Budget is hoping to be under $10

Right now, I am looking into the wireless transceiver chips that Atmel offers. Digikey sells the 2.4ghz version at around $3.50 and the 900mhz ver at around $4.5.
The transmit power for the 2.4ghz is 3db and the 900mhz is 10db. I am trying to find out which one i should use, since usually, higher frequency is better at penetrating objects, but the 900mhz ver has a pretty high output power, so maybe attenuation won't be too much of an issue.

I understand that one can't just buy a chip alone and hope that it works; there are other components as well (crystals, caps, antenna, etc). But in my situation, building one my self is cheaper than getting an XBee.

Also, the Atmel AT86RF supports ZigBee and communicates via SPI (i think, still reading datasheet at the moment), so it shouldn't be too hard to interface with a ATMega328P

100 ft indoors can be a challenge for a cheap transceiver rig.

Some of the kit suppliers like iteadstudio, seeeed, Sparkfun, sell such kits that feature proper external antennas.

The series two XBee is said to be able to achieve 133 feet range indoors, so I believe that I should be able to achieve 100 feet with a higher powered transceiver.

Comparing the range of XBee Pro 2.4ghz with XBee pro 900, it seems that the 900 mhz ver gets longer indoor range (which baffles me, but tbh, i'm pretty new to wireless). This is not a very good method of comparing, so do not depend on what I say. I think I will go with the 900 mhz AT86RF212, since it has higher output power (10mw compared to 2mw; should theoretically give me about twice the range)

Please correct me if I said anything wrong, because I am still very new to wireless development.

Indoor / outdoor range is a function of frequency and the attenuation that a signal experiences while traversing objects. 900MHz analog cordless land-line phones used to be the defacto standard in the US before jumping to other ISM frequencies like 2.4 and 5.8GHz. The latter two are also heavily used by wireless networks. The 2.4GHz signal is typically attenuated less than a 5.8GHz signal in a home. DECT cordless phones in the US use 1.9GHz.

If cheap and reasonable range is important, I'd experiment with a 433MHz transmitter rig. No risk of stomping on your home WiFi network and there are plenty of inexpensive transceiver choices from which to choose. VirtualWire then makes data transfers a bit less painful, I hear. See this site for a suggested setup.