Only you can decide what kind of DJ is right for you.  If any of the lower price DJ's tell you they do all the same things as the more expensive, ask for examples.  Make them be specific.  Below are the items to consider for yourself.  Make a decision and put it in writing.  I can't stress that enough.

Requests:  Does the DJ have to adhere to the bride and groom's requests?  Some DJ's don't think so.  Some DJ's claim their experience means they know best what to play.  My old boss used to do this if the bride and groom told him not to play the chicken dance (he'd play it anyway).  Truth is he was just trying to ensure a good dance for his own benefit (any potential clients amongst your guests).  I believe the bride and groom are the boss.  If they have some music they especially love (or hate) that's their perogative.  Past (extreme) examples included a reception entirely with 30's/40's big band and swing or another with mostly hip hop.  Those were their choices and they had fun with them.

Service
Your DJ:  Would you feel better knowing who the DJ is that will actually show up in advance?  This can be ensure you are always communicating with the person who will actually be at your reception.  With single operators you should know who will show up.  With a multi-system company it ensures you won't be the victim of an excellent salesperson but a poor DJ.  These companies are usually an owner managing 2-12 employees of varying quality and experience.  Your DJ will be assigned 1-2 weeks in advance  and vary wildly in quality-so you'll pay the same but they could send someone who has been DJ'ing 2 months rather than 5 years.  Some multi-system companies will let you select a specific DJ, so if you saw one at a friend's wedding you can pick them.  Personally, I don't think you should have to pay for the privilege, but some companies will charge you a premium.  Either way, your contract should have your DJ's name on it AND a remedy if he doesn't show up (I'd agree to 50% discount if they pull a switch).

Meetings:  Whomever your DJ is you should insist on talking to them in the week or weeks prior to your big day to discuss what you want.  With a cheap DJ this usually means mailing a work sheet with some songs on it.  With more involved DJ's its a phone call to discuss events like dollar dance, bouquet, garter (to toss, auction, raffle).  With high-end DJ's its the option of in person and  you'll have more events like during the social and dinner.  As long as you're comfortable that's okay.  Again, if you think this is important, put it in the contract what you expect (45 minute planning session in person in Fargo/Grand Forks/Minto, etc).

Setup/Arrival Time:  Always, always agree to when your DJ has to arrive and be setup by.  If you decide the DJ doesn't need to be there during the social and dinner make sure his equipment is.  Otherwise you'll have him dragging his stuff in during your dinner, forcing guests to move.  If your DJ isn't from the same town as your reception or with low-end DJ's this can be a HUGE issue.  With more reputable companies it should be a gimme.  Either way, you don't have to put up with late arrivals and you shouldn't pay a premium for an on-time arrival (and that includes being charged for dinner music if you don't want it).  That means either his equipment is there before guests (free), the DJ is there to provide a microphone and background music (maybe $50), or the DJ provides all that and does actual work during the social and dinner.

Microphones:  the contract should require the DJ provide a wireless microphone.  This allows him to come out from behind his equipment and you to use it for speeches and announcements (if he's there during dinner).  Better DJ's will use it to announce for you.  Must be wireless and you should not be charged extra for it.

Clothing and dress:  The DJ must dress appropriately for a wedding reception.  I believe suit and tie or tuxedo only.  Obviously this can changed depending on how casual your wedding is, but the point is you can dictate this.  If your groomsmen are in tuxes, you don't want a DJ next to them, shirtless, wearing a sleeveless leather vest and jeans (true story).

Banners:  Giant banners and other advertising are OPTIONAL (sorry, but this drives me nuts).  If you don't think its okay for your DJ to have an 8 foot vinyl banner with his logo at YOUR wedding, tell them so.  If they insist, insist they pay you for the priviledge.  I think 10-20% off the bill is appropriate but have fun negotiating.

Back-up:  The DJ must have backup equipment onsite.  This is non-negotiable.  If he uses a laptop, he should have something else in case the computer stops working.  CDs, MiniDisc (but not cassette tape).  Personally I have 2 identical laptops (each with their own copy of the music library) and two preloaded mp3 players ready for 3 options total, but a laptop with CD players is typical.  Here is the full list of backup gear that need to be specified in the contract: music player; corded microphone; mixing board; cords; amplifier (not necessary if he uses powered speakers);

Lighting:  This is entirely up to you.  In fact, the problem might be too much.  If you're going all out to decorate your reception hall, you might not want the DJ to setup a giant trussing system and ruin all your hard work.  Lots of lights aren't necessary, but some are appropriate.  If you prefer more of a night club atmosphere bring that up, too.  Talk about what you want and what he will setup.  Ask for photos or video!

Speakers:  Speakers... if you're outdoors/under a tent you'll need more than usual (because of wind).  If you have an unusually large crowd or an odd shaped room you'll need extra.  Some DJ's will focus a ton of speakers onto the dance floor.  I usually have 2-4 and no one has ever complained but 4 is very appropriate.  The real issue is the rest of the room.  I also setup 2 more speakers spread out farther so that background music and announcements can clearly be heard throughout without being cranked up loud.  So if you'll be in a large, L-shaped room with 450 guests you may need extras and your DJ may charge you (how much?  I can rent a pair of powered speakers for $60 from HB Sound N' Light).  If he does setup extra for you because of the large room, make sure they're not all by the dance floor.