Alright, time to lethally inject some of my wholesome common sense into this misguided young thread.
First off, "independent" is a word that we all know of: it means by itself, basically. Independent of anything else. An independent film is a film that pretty much get mades on it's own, without all kinds of external funding. Where's the line drawn? I'm not sure...but I think you can define it, specifically, however you like...just mention what guidelines you're using when you do. No big deal there.
Now, obviously, once the film is made, how and when it is distributed is pretty much irrelevant. If a couple college students make "The Blair Witch Project" on their own, for the most part, then it's an Independent Film. It's not as if a film STOPS becoming Independent when a lot of people see it, or when it's put into movie theatres. While the lack of those latter things is simply something that USUALLY goes with an Indy film, it's not actually part of the definition.
Silver: look man, you have your views, and that's all well and good. I can respect that much...but what I cannot respect is this holier-than-thou attitude I feel vibing from your general direction. Is it somehow more noble to make a small Indy film with local actors than it is to make a large one with "names"? Is it somehow dishonorable to let people give you money to try to make your movie look nicer?
Tom: my apologies! Welcome to MovieForums...please do not let this thread discourage you...though I'd be lying if I said things like this were rare.