Does anyone have any experience with the difference between the cheap swords you get at flea markets/ebay and the real versions that look just like them? Are the cheaper ones usually just hollow handled and made from different metal?
Yeah, I've had experience with both good and bad swords. Things to watch out for are short/thin tangs and lousy steel. Tangs should be as thick as reasonably possible and extend through the pommel. Steel should be properly tempered with a Rockwell hardness of between 50 and 55 or maybe 60 depending on how the sword is used (cutting, cleaving, or thrusting).
Chris Poor's work is outstanding: http://www.armor.com/ (no connection - just satisfied with the work). The Steel Source is a store local to me that stocks a lot of good stuff and also some cheaper stuff. The folks who run it are very good and if you tell them what you're looking for -- battle-ready -- they'll be able to direct you. Other sources like Museum Replicas can be a crap shoot unless you're familiar with the quality of work that comes from a particular source.
Steel quality is the main difference. Good steel is harder to work with but holds an edge very well. The traditional Japanese Katana was made from folded steel not unlike Damascus steel. 9 folds that yield 512 layers. Each layer is VERY thin. Very strong. The final step is the tempering. The spine (back) of the blade was encased in clay to keep it from heating up too much. The edge is heated and quenched to leave it VERY hard. The spine is more flexible allowing the blade to flex.
Once finished, the edge was tested by cutting off heads (yes, people. Peasants). It was noted how many heads were taken cleanly. This number was engraved on the blade. I guess it sucked doubly bad to be the poor bastage that was not beheaded cleanly.