Domain valuation is a function of several factors the most important of which are the following:

-TLD or top-level domain.  The .COM TLD is the most commonly recognized extension for commercial applications and thus highly sought.  However, other extensions such as .net, .org, .info, .tv can be used in certain instances with the recognition that some traffic will be lost to the .COM equivalent.

-number of words and letters.  Shorter domains are preferred over longer domains to avoid losing traffic due to typos.

-keyword search frequency.  Highly-searched keywords and phrases within a domain add value as these keywords are frequently difficult to find available.

-phrase usage.  Commonly-used phrases are preferred over less common terms with similar meanings.

-type-in traffic.  A domain with natural type-in or direct navigation traffic is more valuable as visitors to the domain can be converted to customers if the domain is used to promote a product or service.

-pay per click bid rates.  A domain which contains keywords with high-paying keywords is more valuable. 

-hyphens.  Domains with hyphens are more difficult to type in and sometimes users accidentally omit them.  Consequently, some traffic can be lost to the non-hyphenated version of the domain. 

-descriptive phrases.  A generic domain which accurately describes a business' product or service offering is preferred as it attracts targeted visitors more willing to purchase what the business is promoting.