So assuming you have the .com (You DO have the .com?), then .net and your country suffix (if you are not in the US), and maybe .org will be useful.
In most niches, .biz and .info will not trump the .com in a million years, so save your cash. But getting .net and .org may be a wise precaution.
Similarly, with a rival, if they use .net or .org or a country suffix, you will do well to get the .com - otherwise, the odd type in error will not justify the cost of using their alternatives. And you'd be preventing a third party from moving in and dividing his market share for him ;)
As for wonderful-widgets-online, if you use that, then get wonderfulwidgetsonline.com - that's the 'expected' form, so there will be type in errors to catch - and forward by 301.
If you already use wonderfulwidgetsonline, then wonderful-widgets-online will catch the very occasional type in, but that's all. But it will stop a competitor.
Hope that makes sense. It will vary a bit with the niche and the 'expected' form of domain name; if you work where .biz is common, all bets are off
BTW, all this assumes you have the .com domain - if you don't, then get one, then reread ;)
The very occasional type-in error, that's all. I very much doubt that's worth the cost to you.
But, if someone else buys them (mistakenly, if has the .com), they may choose to aggressivley compete with him, spending promotional money. They will not beat him (unless he seriously deserves to be beaten), and they are not a threat to you - so let them fight with him for his market; their fight is unlikely to touch you. And it will weaken him.
2. As I said above, to stop someone else doing so. In practice you must assess the risk to your site of that occurring.
There's no point YOU buying your neighbour's .org and .net unless you want to protect him from competition.
Please note; I am giving advice here, not laying down the law. If you want to buy every domain in town, that's fine; I'm simply saying that I think, in most cases, that's a waste of money. :)