George English at Writers Weekly has a few tips for you on how to spot bad clients--and why exactly they're bad:

The Conversationalist - "I can't really describe what I want in an e-mail, I need to do it by phone." The problem is, unless you have everything in writing, the client can say you promised anything on the phone and refuse to pay based on the fact you did not deliver. Phone conversations tend to get casual, we agree to do things a little differently when engaging a real person, while writing allows us to filter our thoughts. If you do work with clients on the phone, make sure you e-mail a detailed summary of the conversation to the client and that he acknowledges the e-mail. And, insist on a signed contract that specifies the agreed-to terms.

More tips here.