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You have some trust built into the domain but you would still need to build a quality site and generate it some links to pass any of that trust out.
For mainstream its a great way to generate links, with that, blogger/wordpress/2.0 and the oodles of social sites you can easily generate tons of decent links fairly quickly (check online for 'link wheels' or 'social link wheels'). And the links do benefit you, but again it would depend on what you did with the site as to how much they actually helped you.
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