[LAblondeGPhi]

My thoughts:
1) Do NOT tell your bosses that you are interviewing elsewhere. They don't have the right to know that information.
In my limited experience, potential employers are generally understanding that the people who are applying for their vacancies are likely already employed, and are discrete about that information, even in small industries. In many cases, they prefer to know that you are still employed somewhere, because it indicates that you are a currently valued quantity by someone.
Case in point: several years ago a job opportunity came my way at an office where my supervisor used to work. I was directly asked during one of the interviews if she knew I was interviewing, and I honestly replied that she didn't. My soon-to-be supervisor said that it was perfectly fine, they just wanted to know so they could handle things accordingly (read: delicately).

2) You owe your employer two weeks' notice, and whatever time frame you originally agreed to work for them. For me, I've usually been told that a commitment of at least a year was expected. Acceptable reasons to leave DO NOT include a "better opportunity at another company" or graduate school, but they do include medical issues, forced relocation due to a spouse's employment, etc.

3) If your salary is the primary reason to leave your company, then be aware that you can only use the "I have a better offer elsewhere" card ONCE to negotiate a salary bump.

4) Sometimes a great job opportunity comes your way even when you're not looking. It's not always a matter of being unhappy with your current position, but sometimes a matter of a really great job that you'd be a fool to pass up.

In this day and age, I think that most opportunities for advancement will come from moving to another employer, especially in small companies or industries. Especially at smaller companies, they won't necessarily have a more senior opening for you when you're ready and/or when you need a salary boost. I feel like most folks understand that.