I use a contract (that was shown to me here!:D) and I keep the website hosted on a test site until full payment is received. But I did have to learn the hard way.
So now, when I want my client to be able to see the progress of the site, I give him/her the addy for the test site, and I tell them "I'll make it live when everything is final, I don't like to put unfinished work out there." This satisfies most every client I've had and then I can hang onto the work until the payment has been collected.
So far (knock on wood) it's worked out very well. It seems that the client knows in the back of their head that the site wont be available to them unless they pay.
But for printed work, watermarking and low res are best. That and keeping your fingers crossed.
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