What about beta readers?

An acquaintance asks, "How valuable are beta readers? Who should they be? Do you send them a manuscript or an e-mail attachment? Should your work be formatted and professionally edited?"

My opinion: It depends. I am part of a writer's group that meets once a month. They have been reading and critiquing my current novel chapter by chapter which is in manuscript format (double spaced, Times New Roman, etc.).

Once they and I have finished working and reworking the chapters, an editor goes through the entire MS looking for problems the writer's group missed. Once I've dealt with those problems, I format the book into what are essential proof pages, have Staples print and bind three copies, two-sided pages, and ask three beta readers read it as if it were a book--looking for anything/everything that needs attention: typos, bad breaks, widows, missing little words (of, an, in, at), plus the story as a whole experience.

My theory is that the cleaner these pages are, the more they look like the pages that will be printed, the easier it is for beta readers to spot problems. 

I think beta readers should be people you trust (a recurring fear among amateur writers is that someone is going to steal their work), who are regular book readers, who can read closely, and who are secure enough to tell you when you're running off the tracks. My beta readers are invaluable.