Mimicking the domain names of established, popular URL addresses with the intention of stealing traffic from them is the simplest way for a cybersquatter to begin raking in profits off of your hard work. Your domain name is, most likely, highly malleable in the hands of a cybersquatter. Simply by misspelling a word in the domain name, a cybersquatter can begin squirreling away traffic that was intended for you. Many people misspell queries in search engines and don't bother worrying about it; they think the browser will fix the mistake for them. This is a simple way for an amateur web user to ride on your coattails.
More malicious, and immensely more frustrating, are those cybersquatters who mimic your domain name and then reroute visitors to other sites, funneling users into other businesses. These domain name pirates will cause so much damage to your reputation and traffic that you may have no choice but to accept their offer of purchasing their domain name - your domain name, plus a hyphen, or less a vowel - from them.
Former web-savvy employees may simply want to slander your site in retribution for whatever wrongful acts they seem to think you brought upon them. They may start a site based off of your domain name that contains numerous charges against your customer service, your products, and your character - three things you have worked hard to establish as beyond the pale.
For the most part, these practices are perfectly legal at this point in time, and incredibly common. As soon as you establish a steady flow of traffic you can expect to begin battling rivals and pirates from yourdomain.net, .org, .biz, or the like - unless you take the initiative to invest in a little security against these cybersquatters, and buy not only your dot com domain name, but all the rest as well.
LifestylesClub can help you put these extra sites to good use, managing your sites in different languages (it is increasingly useful to have a site for your business dedicated to Spanish speaking customers) and utilizing one or another for increased traffic building techniques. The ownership of several different domain names is a good traffic building practice in itself - the more links you have to sites of a similar subject, the higher the ratings you get from search indexes like Google and Yahoo!.
Be the master of your domain. Redouble your efforts from the start, and avoid the future headaches of dealing with cybersquatters by possessing all addresses similar to your official web presence.