If it's a three-letter .com domain it has potential. Do you have experience in generating revenue from websites? If you don't I'd stay clear.
I ran a couple of sites once, quite low end stuff where I was getting around 1k visitors a day. Only got like 30$ a month in adsense though.

Why can't you just tell us the domain name, or give a better indication of what it is? Using content you don't own, or have permission to use, then using it to make money seems to be the way to get in a spot of bother, tbh.
I can't really say (paranoid someone might steal it lol). It's just a generic version of a name used in the adult industry and world wide).
Well if you don't know how to generate revenue from it it's still a good buy just to resell the domain.
I highly recommend you go and seek advice here.
http://experienced-people.net/forums/forum.php
Cheers, i'll take a look.