Hello,

I don't think there is the best outsourcing value country for everyone. It really depends on your needs. For example, one of our customers has another small team in Ukraine with rare and excellent skill set which was the most important for him in spite of big time difference and lack of English speaking skills. Rather then picking by a country I would filter an outsourcing teams by some general criteria (the order doesn't assume importance, all of them are important in my opinion):

1. Close time zone and business hours intersection (from one of the reports I've red recently: most of European countries tend to near-shore). Desirable to meet in person.
2. How communication is organized (one of the key factors in my opinion, India and Philippines have an advantage in terms of English language and I guess it's much more easier to communicate).
3. Particular skill set, proven experience, references. It will be probably better to find particular experts at marketplace (like oDesk or Elance) and gather a team consisting of them if you need certain industry experience like speech recognition or video processing/streaming. If the skills are relatively general I would seek for a team which is specialized at this particular stack (RoR, for example). I observed both approaches and it worked.
4. Pricing model and budget (fixed price, risk sharing, gain sharing, etc).

Hope this helps.

Thank you,
Dmitry