I suggest you create a sub domain instead so you don’t need to inform Google that it’s the Spanish version and avoiding duplicate content penalty. Also, it’s more simple to create sub domain then get new domain.
[FONT=verdana]There is no definitely no question of being penalised for duplicate content in this case, for two reasons. First, the content isn’t duplicated if it is in a different language (even Google won’t be clever enough to recognise that one of the languages is an exact translation of the other). And second, there’s no such thing as a penalty for duplicate content.
Regarding the question of whether you should use a sub-domain or a separate domain, my advice would be to do whatever your visitors are likely to find more convenient (I suspect that, in practice, it won’t make much difference, but you know your visitors better than I do).
Look for an established translation agency in your locality.
Don’t look specifically for a website translation service. Translating a website is no different from any other translation project. The important thing is that the translator should be familiar with the terminology of your business or industry.
As for “cheap”, if this is a professional site or one that your business depends on, don’t spoil it by using a second-rate translator. Translating is a skilled job, and you should expect to pay accordingly.