Excellent breakdown Will. I have a couple of questions tho.
Most of the AdSense experts advocate creating new niche sites based on a single keyphrase allowing the webmaster to dominate and claim most of the AdSense income for that keyphrase, except that starting a niche site takes time to be indexed and by the time it is, another stronger competitor might have entered the niche so success is not guaranteed.
So it seems to me that using an existing domain, preferably one with PR, even if it isn't specifically focusing on related keywords would be a good start. For example, let's say I have a general site/blog with PR and bunch of pages what aren't performing but are somewhat related to the keyphrase I want to dominate. The domain has no keywords in it. Should I go for it, or create a new niche site and use the existing site to give the new site a quick boost in backlinks?
Using the Google AdWords Keyword Tool I can already see how powerful it is and finding keyprases with high CPC is easy. But, what is the optimum amount of volume that a new entrant to the niche should be looking at to stand a chance of dominating it with a new domain or unrelated established domain?