Drew Davies at BeADesignGroup.com has a great rant on why you should say no to spec work.
If the entire business community understood the value of good design, and saw the effect we can actually have on their bottom line, there wouldn't be nearly enough design firms to handle all of the business. But when any creative firm reiterates to a business client that it's okay to give away what we do on a gamble of a big payoff, it's a huge setback. So I'm raising the horn again and sounding the rallying cry- if we all band together and tell the business community that, like any other professional service, we provide something of great value that is worth paying for, only then can we win the war. Fellow designers, please join me in saying no to spec work.
There are quite a few good links about the arguement against spec at the beginning of the post as well as in the comments.