Whether you sod or seed, good soil prep is the key. If you spread a couple of inches of top soil over the subsoil and plant on that, your lawn will be crap and never amount to much. There are many good books available at the Library that give guidance.
Also, as Harps said, think about some Xeriscaping or putting flower beds rather than a sea of grass, it's a lot friendlier for the environment.
Mike