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Next Oktober I am planning to go to Nepal with 2 friends. We want to trek from Lukla to Kala Pattar and climb Island Peak after that. We are looking for a guiding company to accompany us on our trip.

I hear a lot of stories about the costs: Booking the trip upon arrival in Kathmandu may save a lot of money compared to booking in advance. I am restricted to a 3-week period, so I don't want a lot of delays like: Waiting several days on a flight to Lukla.
My questions are:

1. For my plans, is it better to book in advance or wait until I get to KTM? And if I wait to book until I get to KTM, is it very likely to get delays for the flight to Lukla and are there other potential problems? What I mean to say is, is the financial discount you get from hiring on arrival worth the potential problems that come along with it?

2. If anybody knows a good guiding company for my trip (that preferably does not cost a fortune), please reply or even better: send me a PM, would be much appreciated!

1) Lukla to Kala Pattar in October/November is a well-traveled walk, you do not need a guide or porters. In fact it's so well-traveled that doing it solo is not remotely a problem. Quite the opposite, it's more fun to do it without the encumbrance of guides and porters to take care of (which I've unfortunately had to do).

Get out of the airplane (or heli) at Lukla, put on your pack, and walk straight up-valley to Phakding, then the next day to Namche where you'll acclimatize for a couple days. Proceed no more than 500 meters/day up to "Lovely" Lobuche (not) and Gorak Shep / Kala Pattar. Then back down to Dingboche, Chukung, and Island Peak.

However, you do need to pay very close attention to proper acclimatization since people can and do get serious altitude sickness even above Namche. I've witnessed it multiple times (including two trekker deaths on Cho La Pass) on my two treks there.

2) As for Island Peak, if it were me I'd definitely try to arrange it through Alpine Ascents International or equivalent. Frankly I find the local guiding companies to be a bit hit-or-miss; I've personally had an unfortunate experience with one, and heard of others. I'd not want to entrust my safety entirely to them, regardless of cost savings.

I'm pretty sure that reputable Western guide companies will arrange to meet you at Dingboche or to hook you up with an existing party, since I hung out with someone who was doing exactly the aforementioned itinerary with AAI, in exactly the manner described. However she did have some previous climbing experience with other AAI expeditions. Not sure if this would be a consideration, or whether they'd want you to do the entire itinerary with them. Likely they'd want to check you out as suitable for Island Peak, because they don't want endanger their guides or other climbers.

It's certainly worth calling around well-beforehand to see whether a reputable Western guiding firm can assist you, or recommend someone who might. In any case they always work with reputable local Nepali and Sherpa guides and staff if that's a concern. It was some time ago, but International Mountain Equipment of North Conway NH used to have an "affiliate" shop in Namche, so they might be able to help you out.

If I was planning on Island Peak - and I do think about it from time to time - that's exactly what I'd look into.