When a domain owner fails to pay the renewal fee for a domain name it goes through an expiry process before eventually becoming available to the public to register again.
The whole process can take several weeks.
* Initially, services to the domain are suspended although the owner may then pay the renewal fee to reactivate the domain name.
* Next, the domain enters a redemption phase where the original owner can pay a redemption fee (higher than the normal renewal fees) to reclaim the domain.
* The third step is that the depend is marked as "pending delete".
At this point, the domain can no longer be reclaimed by the original owner, however it alerts anybody interested that the domain is about to become available again.
* Finally the domain name is deleted, and becomes available to register.
Usually, the quickest person or business to register can now get the domain - although of course in the case of a valuable domain name there may be many people competing, and registrars themselves may be among the competitors (and registrars generally have advantages in this race).
As already hinted at, the best expiring domain names tend to be very much in demand.
This basically for two reasons - firstly, the name itself may be valuable - and secondly, although the new owner won't acquire any previous content hosted at the domain, they will usually inherit any inbound links from third party web sites and directories such as Yahoo! and DMOZ (which of course means the new owner may be able to benefit from some free initial traffic).