Wise words netmeg. Long ago I launched a site on a subject that touches the daily life of 80% of the population. I love these and so do many others and the competition is beyond fierce. I've carved out my little corner of this main subject and there is simply NO WAY any one site can dominate the entire subject, it's too popular.
I hate building links and I hate spammy "wow factor" content yet I spend 80% of my time chasing backlinks and posting content that gets the "wow factor" and related mentions in social sites as well as backlinks. It's required. No wow factor + no finger breaking backlink searching = no chance of headway into this niche.
I see hundreds of new sites and blogs on the subject, all doomed to varying degrees of failure. The top dogs are wall st backed with editing teams and multi-million a year CEO's.
I can't make myself sell the site but I would STRONGLY advise others to avoid it. There is one problem though, today's opportunity niches are tomorrow's impossible niches. I could be spending my backlink time on one of those but is it really better to "start fresh"?
On the bright side Panda did shake things up, one of my strongest competitors took pride in being first to release any industry press releases and it worked for the longest time. Now the site gets 20% of it's pre-Panda traffic and obviously relying on publishing press releases was a bad idea. We've spoken and he has connections and often got a friendly heads up a day before everyone else, that's of no value to Google anymore apparently.
Back on topic - I think Google wants your site to link to all of the sources it deems related and to have links from all of those sources. Links to other sites, or from other sites, especially if they aren't editorial in nature seem pointless. Reciprocal linking is back on the menu imo, topsites didn't get hit by Panda as much as article directories did.