Keep in mind that the words "foreclosure" and "pre-foreclosure" are not synonomous with "deal". Just because someone hasn't paid their mortgage on time, that does not necessarily mean that the home will sell below market value. In fact, many pre-foreclosures are from borrowers with 100% financing, who have no equity in the home and therefore cannot sell the home for less than they bought it, without bank approval...hence the short sale.
Yes, you can get a good deal with a short sale if you're patient and willing to do the leg work and deal with the competition. Having cash would help your cause greatly.
The other way to do it would be to look at the current inventory and find a home that you feel is priced right or under market and make a deal that way. A good deal is NOT getting a home for less than the asking price, it's getting a home for less than market value. If you get 5% off an over-priced home, you still might be paying too much. If you pay full price on a well priced home, you're getting a good deal. Point is, think about the overall value, not just the price below asking.