According to news reports the sex.com domain name recently sold for $14m.
Of course, only a tiny proportion of domain name sales generate anything like those kind of profits - but the fact that domain names can be registered for a few $ per year, and potentially sold for tens/hundreds/or-more times that - can make domain name speculation an appealing market for the Internet entrepreneur. Head-on over to, for example, Afternic and you can an idea of the kinds of domains that trade routinely.
Want to break into the domain trading? Go take a look at How To Sell Domain Names.