The key to making a craigslist competitor is to take away the painful parts and the embarassing parts:

1. Carrying your old school monitor to the post office to send it

2. Meeting people face-to-face and that uncomfortable stilted conversation.

Solve those two problems.

meh, I just have them meet me at one of the rest stops on the parkway...they show up, give me the cash, I give them the stuff and I drive away.

Its public so no slasher worries for the buyer or seller.

Yes, you do.

Well it doesn't hurt to have a CCW permit...or worst case scenario a tire iron within reach

I really like that take on it, hadn't considered that...

I'm curious, has any company (IT or otherwise) ever beaten an incumbent with a long headstart & network effects by creating their own walled garden? I can't think of any, but surely there must be one.

MSN vs ICQ comes to mind. (note that AOL is a non-start for the other 5.7 billion people in the world) Facebook vs. Myspace?

Hmm facebook hasn't yet beaten myspace. I think MS vs lotus also works, though the network effects arent' as strong. I wonder whether all the examples are from microsoft.