From my experience, it's much better to start with an agent. Publishers tend to treat the agents as a filtering process (i.e. if someone chose to put the time and effort into representing you, then you must have a bit of talent). I haven't met anyone who was successful in going straight to the publisher, but I suppose that's not to say it hasn't happened! I just figure that with everyone at these places (and any business for that matter) being so busy, they are less likely to pick up a manuscrpt from someone they haven't heard of, or have no professional connection to.
Beta readers are vital... friends and family are a great place to start. Make sure you choose people who are willing to be honest with you, though... they make your work better by pointing out the areas that didn't make sense or could be improved.
Only advice I can give you is that if you're going to get it professionally edited before you take it to a publisher (whatever happens, it needs to be professionally edited at some point, which = $$), make sure you get the person's qualifications up front, as you'll need to cite them to the publisher should things go ahead. Publishers tend to have their own editor's they work with and trust, so they might want you to fork up the cash to pay for their services, even after you have had someone else do the work (if they don't feel the other person's work is up to scratch)... so choose wisely.
Anyway... hope that's useful to you!
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