My turn to be the newbie: Is there a high-level discussion of the economics of NameCoin or DNS in general somewhere? What is the scare resource that needs to have a price attached?
My half-baked thoughts:
Seems like domain names are not the scarce resource; CPU power available to process transactions is the scarce resource. So it seems to me simply not allowing any free transactions, allowing an arbitrary number of "new domain" and "domain transfer" transactions with arbitrary fees attached, and allowing the mining nodes to decide which transactions to accept into their blocks and which to drop will create the "right" number of domain names at the "right" price.
Any individual, well-known domain name is a scarce resource. "google.namecoin" is worth more than "xblkje4klj21.namecoin"... but if I want to get the google.namecoin domain name from google (or a domain squatter), and google or the domain squatter is willing to keep paying the (minimal) NameCoin renewal transaction fee, then I can just offer them cash or bitcoins (or NameCoins) to transfer the domain to me.