I've been following your blog for several months now and have found your posts to be knowledgeable and very helpful.
I am hoping to get your insight on an idea for distributing a young adult novel. The novel is my way of sharing the basic beliefs of the LDS church in a story form. My goal in writing it was not to be famous or make money (although either is welcome), but to share my testimony with others. That being said, my thought is to create a website where I would post a chapter a week for anyone to read freely and also offer the option to purchase a hard copy of the full book from an on demand publishing site, like lulu.com.
Being in the publishing business, what are your thoughts on such an idea? Pro's/con's?
Are there legal issues to be considered?
I don't have a problem with that at all. I think it's a great idea, given your reasons for writing it and your stated goals—as long as you understand that if you do this, a traditional publisher will most likely not pick it up for publication in the future. (Although, I worked for a publisher once who did just that, but the author had to agree to take the posts down.)
You should still have it edited. This is a must if you're going to have it available for purchase.
You may also want to have it typeset and a cover design done by professionals—or not, depending on how much you want to invest and how important it is to have print sales. Personally, I think it should look as nice as books of similar content and style that you'd buy in the store.
Lulu.com is a good place. As is CreateSpace (Amazon). If you want to make ebook versions available, Smashwords is easy to work with. I've worked with all three of these companies and had good success with them.
There are a variety of other POD publishers out there. Just make sure you read their contracts carefully. Make sure that you retain the copyright and the ability to republish elsewhere at any time. Also, make sure their prices are competitive.
And good luck!