It all depends on what you want to do.

Do you want to basically work on your own app but perhaps do custom installs of it, or integration work with it and other systems? Then focus on building on a basic app - while you're talking to potential clients. See if any actually want to use it, and what the pain points are.

I don't do 'design' work specifically, but I suspect if you were pitching 'web site design' to people, they'd want to see a portfolio.

Here's my 'portfolio':

website with my name on it, my location, and some description of what I do.
links to sample code/projects (just a handful)
link to blog
link to resume (outdated by 2 years)
list of some moderately current projects (yes, I know you won't have that right now)
list of tech I like to work with

That's my 'portfolio' on my site.

What often gets people to me, however, isn't that. It's referrals. Word of mouth referrals from people in my network. But perhaps even more importantly, I participate in local user groups. I nominally still run the local php/mysql group, although I don't do as much day to day as I did years ago. But having my name associated with the local PHP group on meetup.com means I get cold calls from people just because I organize the group.

I get probably 1 a month on average - some random project someone needs done, and they don't know where to turn. They don't care about my resume, portfolio or anything else. They have a need and need it done fast. I sometimes refer them to other people in the local group or my larger network, or take it myself.

"networking" is important, but sometimes a nebulous idea, especially for people who are just starting out. Join other networks - get out there and socialize some, and let people know what you can do. But also promote yourself. An easy way to do that is to run your own group and publicize the heck out of it.

Here's another idea:

Go to local chambers of commerce and organize a 'meet the geeks' ("meet and geek" as a name?) night for local web freelancers in your area and the chamber members. Have it be informal - maybe a couple short presentations by people in the group about "how to get started on the web" or "things to look for in a web designer". DO NOT present yourself, but do organize it. Get everyone's name.

The local chambers should be able to find a space and food and get the word out to their members.

Make yourself known as the go-to guy/gal in your area for work. Even if you can't do the work yourself - that's not as important as being the middleman for that information.

This will end up paying dividends simply because almost no one else will ever do this. The fact that you put 3 hours in to organizing an event and getting people to do something will raise your stature and peoples' estimation of what you can do 100x what it actually is, but that doesn't matter.

Feel free to ping me if you want to discuss this more, or need more help getting started freelancing. I run indieconf.com, a conference for freelancers - perhaps you could attend this fall? (shameless plug!)

EDIT: Someone wrote me asking why I said to not introduce yourself. I was saying "don't present yourself" as in "don't do a presentation yourself", but instead have the event be a spot for other people to present themselves. You'll still have a chance to meet and mingle with X other people, you won't have to be as nervous, and the people you spotlight will reciprocate nice things back to you over time.