At the HubSpot user group and Inbound Marketing Summit a lot of people were talking about the new .co domain names available, and asking if they were better or worse than .net or .org and how they compare to .com. Thanks to Dharmesh Shah for adding his thoughts.
Mike's Email to Dharmesh
Dharmesh's Email Reply
You're right on all counts.
I think they're OK, but .com is still the standard. Except for quirky things (like domains for URL shorteners), I wouldn't use a ".co" as the primary domain for a business. I kind of prefer .net/.org since they've been around longer and people recognize them more.
Also, having the ".co" domain when you don't own the .com is not a good idea. I'd pick a different domain.