I consider domains with stems beyond 11-14 letters as long, and it's a fairly short trip from there to awful. Conversely, I'd consider six letters or less as short. There are probably curves showing the domain names length distributions somewhere.
Two words are fine when they go together. Three words gets into questionable territory unless it's a very familiar phrase (like, "ILoveYou").
Long names can still be valuable. Dnjournal shows some quite long names going for Xxxxxx ---> enterprisemobile.com. Valuable, but I consider longer names as riskier ventures. For .mobi, I think short will be exponentially more desirable.