Very recently I joined a geo domainers group and quickly found out that this niche is hot and burning!
Firstly lets understand what "Pure" Geo Domains & Geo Generic Domains are. Geo Domains are domains purely having the names of Cities / Countries / States / Islands – any geographical site where communities exist and business can be conducted. Examples are Ireland.com / Denver.com / Texas.com etc
Geo Generic Domains on the other hand are generally two-three worders where the First Word is the Geo Name and the remaining words constitute Business / Keyword. Something like DenverStore.com / IndiaCricket.com / AustralianBeer.com / AucklandFinance.com etc.
Some Geo Generic Domains are still available (thought not with the best keywords and biggest cities), and there is good scope for development. People getting into Geo & Geo Generic domains are thinking of the future. With more & more cities around the world getting commercialized and businesses realizing the worth of the Internet, there is already a demand for good generic two worders. If your a local business looking to grow, what’s better then having your <City><Business> name?
Often people ask that if a business does want to develop its brand, why go for a generic name and not their own companies name? Well the simplest of reasons is that the searches on the web are generally done for that particular generic like "denver book store" OR "manhattan pizza" and not "Kathys book store" OR "jib jabs Pizza". Developers have a strong inkling that Google would soon be forced to show search results related to your geographical area. That is if someone lives in Tunip Town in Auckland, and is searching for bookstores, the stores existing in Tunip town would show up first. This would give Geo Generics the first preference.
I recently acquired a handful of <CITY><GENERIC> and <COUNTRY><GENERIC> names. I would be putting up websites on them in a jiffy now, there’s absolutely no time to waste. I would be doing an awful lot of reading on this too, and will keep my posts updated 
Can you post or email me the geodomain forum link or any other websited where more discuiion is done and even i would like to take a couple but want o know more before i get into that ..Thanks for the post
sure the forum is GeoDomainer.com
Its got some really big names in there! Its comparatively new, but you can immediately see the quality of discussions.
Hope that helps.