Hi John,
My experience has always been as a one-person show .. or very small shops. Most small shops I have worked in have not had any formal testing procedures.
I was able to help implement a some-what formal testing process in my last job and it was amazing how many bugs were flushed out. My biggest complaint was that the person doing the testing was not a formal tester -- she was an accountant turned trainer/support/testing person. Her idea of testing was no where near my idea. She just quickly ran the app to see if it worked. She didn't try to break it .. nor did she try different combinations of things. She just tested the "expected use" scenario and that's it (and even then she didn't do a very good job.)
I was also trying to establish a formal processing of using a few customers as beta testers before sending the app out to all clients. However .. I could never get this to happen. The release was always running late .. and things always happened .. and it was always a rush to get it out the door and skip the beta testing. Needless to say, there were times we had egg on our face when a bug went out to everyone. Had we sent it to beta testers, only a few customers would know about it and the rest of them would get a better quality product.