First, no supervisor in their right mind would take an employee asking for more responsibility as a bad sign-if they do then you need to rethink if it’s the best work environment for you?  Requesting you take on more shows that you have initiative and are willing to work harder to move ahead.  The best way to show your boss this is not necessarily to “ask” for more work, since most supervisors think they are overworked and understaffed to begin with.  You should look for areas of improvement in your department or find an initiative that has been abandoned due to lack of support or resources and determine whether this is something you can take on.  Approach your supervisor with a well thought out business plan and how you can take on this project without it impacting your current responsibilities.  Most supervisors will welcome someone who shows up with the solution instead of asking for someone to give them more work.  Because believe it or not, you asking for more work, is in essence creating more work for your supervisor to think of ways to keep you busy and motivated.  Don’t make the solution to your problem your supervisor’s problem, come up with the solution so it’s a win-win for both sides.

You should ABSOLUTELY ask to be paid for your work.  Now unless she was asking for you to “volunteer” your time, any work you perform should be compensated for even if you negotiate it at a reduced or per-diem rate of pay.  No one regardless of the situation should be asked to work for free.  Even graduates can get $10 or more working at a fast food restaurant, why would you think you are any different because you are currently unemployed?  You want to preserve your self-esteem and your sense of worth especially if you are in between jobs. Having someone offer you work in the interim is a nice gesture but if they are not willing to compensate you for it they are really not doing you a favor. Even babysitters get minimum wage-ask yourself why wouldn’t you deserve at least that much?  Next time someone “offers” to have you work for them tell them you would love to but can’t take time out from your job search unless there is some compensation involved.  After all if you start adding up your car, gas, travel and other expenses it might start costing you to work for them for free!  Now you tell me, what’s fair in that!

Always trust your instincts and don’t second-guess your decision no matter how crazy it appears in hindsight.  Sometimes your first reaction is the right one since you are following your gut. Trust that there must have been something about the other opportunity that did not ring true for you otherwise, you would have jumped on it. Knowing yourself and knowing what you want and more importantly, TRUSTING yourself are two life skills you possess that should not be underestimated.  Just because the economy is tough and someone is offering you more money and a bigger title does not mean that the job is right for you.  The fact that you know that and are willing to go with and trust your instincts is a commendable act and you should hold your head up and keep moving forward.  There will undoubtedly be better opportunities for you in the future so don’t think this one is it.  You did the right thing and you will look back and see why this was not the right move for you now.  Better things await, hang tough and congratulate yourself for knowing what you want and when you want it.

Having a strong sense and value of what you are worth on the open market is nothing to be ashamed about.  Many colleagues underestimate their value and are afraid to admit that they need a certain amount of income to even survive and get caught in the guessing game of how to appropriately price yourself in the market.
Knowing your financial situation well enough to know what salary you can afford to work for is a very important part of the job search process most people do not focus enough time on.  Candidates usually wait until an offer is extended and then worry how to respond, what should they counter with, will they lose the offer that they forget that they should know the answer to this BEFORE the interview process even starts.  You should not apply for jobs that you are over qualified for particularly if the salary is 25% or more from where you want to be.  Now, if there is bonus or other compensation incentive built in you may need to run the numbers and decide if you can live off the base depending on whether the total cash compensation meets or exceeds your expectations.  You are not a snob if you are clear about your salary expectations and you have a right to be fairly compensated for your work.  If you are not, then there is no point as you said wasting your time or theirs because chances are you’ll be back on the streets again in 6 months looking for another higher paying job.

Breaks in service, depending on how long can be tricky to explain away on a resume.  The good news is if you are already in an interview you got past the hard part, how to explain it put on paper?  I never recommend putting a break in service of longer than 12-18 months as personal leave, because let’s face it, we are in the U.S. and our leave laws do not compete with our brothers in Canada or the EU.  If there is a break for maternity or child care or elder care issues, I usually advise people to list that you were “consulting” putting a project name next to the break and indicate some work you may have been doing during that time including any volunteer work as well.  Many people take on projects to supplement their income during breaks of service yet forget to mention this because they were technically “unemployed.”  Remember to highlight as much of the professional work you’ve been doing during this time so you can steer it away from the personal and steer it back to what you were doing professionally at the time.