I'm not a paint expert and want to make a choice that will last a few years. I know that powder coating will last a long time, but I'm restoring an older bike and don't want to spend too much. Maybe someone has a creative solution.
Powder coating, done right, is quite durable. I have had it done on an old steel frame a few years ago and have been happy with the result. The more expensive alternative is regular paint.
As far as vehicle owners go, you can't find ones that are more vain than motorcycle riders. These people often get paint or powder coat jobs done. The good news for us is that that means there's always a nearby facility that can handle bike frames. Bicycles are just like motorcycle frames except more simple. So, look for places that handle motorcycles and you then know they can do bikes too.
What you need to do first is to take off all parts from the frame including the bearing race on the fork (will require a bike shop or very special tool). The shop will then be able to blast the old paint/coat off your frame, clean it with a solvent and apply a base coat and paint or powder coat. If the shop has done motorcycle frames, they will know what to do with holes and threads and know which areas should be free of paint.
What kind of steel? IIRC, powder coating/anodizing can't be done on all metals, and some metals have less options and are more costly (Such as Ti frames). Also, you have to consider the effect of the heat in the process on the welds, and whether they will be affected.
A paint job will probably never be as durable as powdercoating or anodizing, but unless you're really hard on your bikes, the only places you might notice it are on the unders of the bike where rocks may strike, and you can get clear protectors for those areas if you want.
The other thing to consider is if you want customization. Take a site such as HotTubes and the paint jobs they have produced, you aren't going to be able to get that with a baked finish.
Is there any difference between professionally painting a car and a bike frame? has a lot of suggestions about powder coating. DIY Painting a Bike Frame: Is it possible? talks about stove enamel as an alternative to powder coating.
There are a lot of business that will strip/repaint a bicycle frame using quality paint.
The Color Factory advertises in Velo News, $140 for a repaint with Imron;