The relation between the nanoscale morphology and associated device properties in conjugated polymer/fullerene bulk-heterojunction "plastic solar cells" is investigated. We perform complementary measurements on solid-state blends of poly[2-methoxy-5-(3,7-dimethyloctyloxy)]-1,4-phenylenevinylene (MDMO-PPV) and the soluble fullerene C-60 derivative 1-(3-methoxycarbonyl) propyl-1-phenyl [6,6]C-61 (PCBM), spin-cast from either toluene or chlorobenzene solutions. The characterization of the nanomorphology is carried out via scanning electron microscopy (SEM) and atomic force microscopy (AFM), while solar-cell devices were characterized by means of current-voltage (I-V) and spectral photocurrent measurements. In addition, the morphology is manipulated via annealing, to increase the extent of phase separation in the thin-film blends and to identify the distribution of materials. Photoluminescence measurements confirm the demixing of the materials under thermal treatment. Furthermore the photoluminescence of PCBM clusters with sizes of up to a few hundred nanometers indicates a photocurrent loss in films of the coarser phase-separated blends cast from toluene. For toluene-cast films the scale of phase separation depends strongly on the ratio of MDMO-PPV to PCBM, as well as on the total concentration of the casting solution. Finally we observe small beads of 20-30 nm diameter, attributed to MDMO-PPV, in blend films cast from both toluene and chlorobenzene.