Greetings,
I've been doing this for 2 years. I haven't seen a book that walks you through the process. But most of the advice given here is good. Here are some lines you may want to think about first that could save you some headaches.
For Non-Drop domains
1) First check to see if a domains available. Usually you can use whois.sc and see what domain names are available and what extensions may be as well. You will want to check overture tool which tells you roughly how many people searched the keywords that month and see if there is a logical variation that makes sense and is searched heavily. This is important since keywords drive your traffic, but more important is the content the site provides. Keyword density (how many times a keyword is used properly inflates the page rank higher) is also crucial.
* Most 1, 2, 3 and 4 letter or short word domains are gone. You will pay a fortune to get them. So a good 4 or 5 letter domain is worth a shot. Some folks sell their names on this site and i've seen some good names up for grabs fairly reasonable.
2) Check the trademark and patent office to make sure your domain name wouldn't be interferring with intellectual property rights. This could cost you both the domain and money if you infringe on them. It takes about 10 - 15 minutes to do but worth the piece of mind. visit
www.uspto.gov and search both trademarks and patents. Anything close (even remotely) could pose a threat.
3) Ask yourself, Why would someone else want to buy it from me? What makes anyone want the domain name?
4) Drops are great ways to get good names, but there can be a little competition that might drive the good names up in price. So be realistic in the pricing of a domain and realize that if a site name is popular and dropping; chances are there will be a swarm of domainers waiting in the same waters for it to hit.
Check Sedo.com for domain names as well as TDNAM.com both have bargains every so often. Sedo is also a great place to list your names for sale for free as well as park for extra $. Sedo only takes a percentage once the name sells. Moniker is popular as well.
Good luck,
G