We just made an explainer video ourselves, and went through the same questions. Contrary to what Thomas said, I actually thought a cartoon / animation is cheaper than a "real life" video. My personal feeling was that animation is the safer route...it's hard to go wrong, but also hard to be amazing. A real life video, on the other hand, is risky: if done poorly, it could look really, really bad. But when done well, it's usually better than an animation.
We hired Pixel Valley Studio (http://pixelvalleystudio.com/) and it was a pleasure working with them throughout the whole process. They were involved in the initial brainstorming stages, gave great advice as to which option we should go with, and did a bang-up job creating and producing it. Very reasonably priced, too. I highly recommend them.
You can view the end result on our homepage, www.hostfully.com.
If you're still in the market for a video, or know someone who is I create animated and screen recorded videos; amongst other things. I would very much appreciate it if you took a look at my business, www.wondar.co.uk
I make high quality videos at a very low price. My costs are low because my business is a start-up; however, I am a professional, I have been making videos for other large animation agencies for years. My prices are going to remain low – pretty much zero margin – until I get some presence in the market. Currently, I make videos for one of the UK biggest online retailers and I am a safe pair of hands. Also you can find work I have completed for competitor animation studios on my Vimeo page if you search for Lee McRae.