What makes a domain name valuable?
 

Obviously short one word domains are probably the ultimate domain, but I see domains being sold that I just don't get...

It seems multiple random words strung together can fetch hundreds or thousands of dollars.

What makes a domain name valuable? (just the name, not the site)

how much someone is willing to pay for it .

There's the value and then there's the jack-up.

Plenty of people in the business of buying domains off each other to give the impression they're worth something just in case some newbie with cash to burn happens to be standing around.

As to value, the chance people will type IT in when wanting to get to you. Especially if your brand is short and memorable. Which is why lolcunts.com, .net or .org are valuable to me.