I currently own the following generic domains with the .co extension: Adirondack.co, AminoAcids.co, Damask.co, and Filigree.co. As far as I’m concerned, the value of a generic domain is based on the brand-ability or prominence of it’s extension. “.Com” is a household name, there is no confusion in a .com name because people trust and associate it with Commercial. The same can be said for .net and more importantly .org which most people associate as trustworthy when it comes to advice on topics such as Health.
.Co has some potential, however, it is contingent upon as long as the registrars continue promoting the extension as a GTLD and so long as it’s founders improve their already effective marketing strategy.
I’ve seen a few doing well in the SERPS, Google does allow you to use them as you would a GTLD. I imagine more are not seen on the front page because most people are squatting and have the domains parked and the other half are not properly developing their domains for their desired keywords or they are targeting highly competitive keywords with weak content.
It’s all about what business your in. If you’re looking to flip undeveloped domains then .co is probably not a wise investment. If you’re looking to build a new business on .co, you are still taking an enormous risk considering that many of your customers are likely to type .com but it’s something to consider If you can’t find a good name elsewhere.