This is a new free guide by the Research Information Network. Peer review: a guide for researchers summarises the peer review process for articles and research proposals, and has sections addressing the costs and possible alternatives. I introduce the concept of peer review to my students as part of discussing evaluation and selection of sources, and I might refer them to this new document now. A lot of the material discussing peer review is complex (being aimed at academics) and therefore not suitable for this purpose, so up until now I have actually found the Wikipedia entry on peer review one of the most appropriate for students.
http://www.rin.ac.uk/our-work/communicating-and-disseminating-research/peer-review-guide-researchers [URL updated 26 Sept 2010]
Photo by Sheila Webber: Pigeons in the park, April 2010