In a quandary

I am in a quandary now what to do about Rosie. I received a letter from the publisher on Saturday and it has got me rather confused what to do. They say that they like my book but not enough to offer me a normal (non-contributory) contract but one with certain considerations. These considerations are that they are willing to offer me an agreement whereby they do all the work, apart from revisions (I think) but with a financial commitment from me. I have emailed them to ask does it mean they expect me to pay something, how much and what for. I am going to wait to hear from them then decide what to do. Meantime, I have also emailed the other publisher who I emailed back in May querying Rosie as I haven't heard from them. The letter I got has really got me thinking what I want to do and I started looking up self-publishing companies but have decided that I want to try my damnedest to get it accepted by a conventional publisher and I don't get any joy then I will seriously think about the self publishing route, although I do have to pay for some of that.