Per hour is consulting, Salary is Employment
Per Hour and "Salary with Benefits" are just the arrangements in which workers gets paid. Even if a vendor has hired a worker on "salary with benefits", he is still a consultant to the end company. Though one may have job security if he is full time with a big vendor, still he has no escape from project timeline, travel etc.
Paid more than employees
The fact is that the end company usually pay more ( excluding long term benefits ) for consultants. But it never mean that the consultant gets more money. The fact is that, with consulting comes the series of services companies / vendors. So it could be that whatever surplus consulting gives, it get's absorbed by the vendors.
Get paid more if there are few vendors in chain
It's very common to have 2-3 parties / vendors in between consultant and the company. Usually consultant would believe that he might get more money if he gets recruited directly by the preferred vendor. Practically its not true most of the times. Vendor will try to pay consultant the same money irrespective of any number of parties in between.
High probability of getting selected if there are less vendors in between.
This is the biggest myth that companies would prefer the candidates with less vendors in chain. For example - You may think that you have a better probability to be selected if you approach Vendor X directly rather than going to X through Vendor Y. On Ground, its not true. For Reason to this ,Please ask their HRs. Corruption rules :)
Have to be more smart, productive to be in consulting
Most of the time H1B IT consultants does lower end implementation work. Well actually they do the least intellectual work :).
Consultant are hired only for temporary work.
Well this is true for most of the cases but not always. Companies also do "contract to hire" so that they can evaluate the resource before giving the full time offer.