What about typos of generic words? I asked this question
here recently. Traffic coming from typos of generic words
should be just as valuable as the traffic coming from the
generic word. The person is still looking for the same thing,
they just typed it wrong. (e.g.: mattress vs. matress)
I can see that typos of trademarked sites should have
less value, because the person who mistypes the word
does not end up at the site they intended, so that is not
quality traffic (although you can make money with that type
of domain, it might not be where advertisers want to advertise).
I don't think search engines should totally ban typo domains.
There are so many mis-spelling of words now to come up
with unique company names, and made up words, that how can
you monitor it all? Some made up words could seem like typos
but are actually legitimate sites and businesses (e.g.: cingular)
The best the search engines can do is what they are doing now,
include a line that says "Did you mean to search for ..... "
Plus search engines don't impact direct navigatin anyway.
I wouldn't want to see a browser filter for typos or anything - it could
filter out legitimate sites. It's the same as if your internet service
provider filtered out competitivite sites, they could do it but
too many people would complain. (in fact I've read of some instances
where they tried this).