My experience with Craigslist is similar to Tim's. A lot of very flakey folks, plus lots of would-be scammers and spammers. However, there are legitimate buyers out there; just be prepared to sift through a lot of chaff to get a stalk or two of wheat.
What's the most effective use? Alex suggests land contracts, which are particularly popular in the Michigan area. Here in Virginia, a similar technique is lease-options or rent-to-own. (People just understand those terms better here. In Michigan, you'd definitely promote land contracts as the creative financing technique.)
Especially on Craigslist, focus more on the monthly payments than the total cost. "Only $3,000 moves you in" or "Only $1,200 a month" works a lot better as the grabber than $150,000 for this 3 bedroom . . . "
If you go with creative financing, include a phrase in the heading like "Weak Credit OK." Or "No Bank Approval Needed."
Admittedly, that'll attract more flakes than a conventional listing, but will also produce some valid buyer.
If you're posting lease-options, lease-purchases, etc., then post under rental properties, as well as properties for sale.
Another technique--that I'm surprised hasn't worked as well as I'd expected it would--would be to offer "Free Foreclosure List" or "Free Short Sale List." "Free" is, of course, a magic word. Plus lots of people looking on Craigslist are looking for bargains, and they have the perception that foreclosures and short sales are bargains. And, as you may have seen here on Trulia, lots of buyers don't know they can get the lists for free from Realtors. (Lots of questions along the lines of: "Is there any way I can get a list of foreclosures without paying or subscribing to some service?")
Post often--every day. But vary your wording and your offers enough to comply with Craigslist posting rules.
If you do post specific properties, a lot of the otherwise valid calls you get will be along the lines of: "I saw your Craigslist posting for 123 West Washington Street. Can we see it in 30 minutes?" Just be prepared for that. And also be prepared for a higher-than-normal rate of no-shows.
Hope that helps.