Laminate vs Engineered vs Hardwood
First off, let's talk about the difference between engineered, laminate and hardwood flooring. Engineered wood floors are a very thin layer of hardwood over plywood or MDF. It your best option for use over radiant heating systems,concrete or in places where moisture may be an issue as the many layers provide greater stability than a hardwood floor. Laminate is literally a photo finish that looks like wood (or tile) that is glued to a HDF (high density fiber). Think Pergo. Laminate floors usually float and, speaking from experience are quite noisy to walk on in heels etc. It is easy to install and the least expensive option of the three. Hardwood is wood throughout and is nailed down.
So you've decided to go with hardwood - should you buy a pre-finished or unfinished floor? Pre-finished floors are a sure bonus for people in a time crunch. The floor does not need to cure which can take anywhere from 72 hours to 3 weeks depending on staining and finishing. You won't have the dust and cleanup that come with an unfinished floor. That said you can't customize a pre-finished floor in the same way that you can customize an unfinished one. The options for an unfinished floor are limitless. The other downfall is the v-groove that comes on all pre-finished floors (see photo at left)- many of my clients find them distracting and prefer a completely flat surface,. If you're doing a whole house remodel, or new construction, I'd tend to opt for the unfinished. If it's a weekend project, a pre-finished floor is your best option.
As Chris Zizza pointed out - this is a must. All dust collection should be routed from the sanders to a long hose, out of the house and into a truck. Some companies cut corners and have a small machine,or even worse, a shop-vac. This is NOT dust-free as shop vacs leak dust, and any changing of collection bags etc will release dust into the air. Dust can take quite a while to settle, and so even though your living room has been freshly vacuumed before they applied the finish, the dust is still in the air and will eventually get into your finish as it falls. You want all the dust being collected OUTSIDE your home.
Another Note on Sanding
Most unfinished or refinished floors are sanded several times with different grits (heaviest grit to lightest) before they are finished with stains and polyurethane. Chris pointed out to make sure that corners are not cut by skipping more than 1 grit at a time as the result is ridges in your floor. You may not be able to see these, but the downfall is that when the poly is applied it will sink into the ridges. A second coat will be applied and that will also sink but come closer to evening out the surface. The third coat will be applied and that will barely cover the tops of the ridges. This floor will surely fail as it's not fully receiving the three coats of poly and you'll have to spend money to refinish again in the not-so distant future.
There is a TON more to know about flooring finishes such as the hardness of the wood, different cuts or the wood, lengths, staining, cure times etc. It is very important not to cut corners with the best price but to spend time finding a flooring specialist that you trust. It may cost more upfront, but is a job you want done right and more money now means a floor that should last you a lifetime.