Searching for niche ideas online can be time consuming but rewarding in the long run. Spend as much as time you can before you finalize your site's main idea.
Let's look at various online tools to help us.
The Yahoo Directory - Has a listing of almost everything organized into categories and is the oldest out there.
About.com - Its a mega wiki, having tons of articles on almost every subject.
Technorati- Aggregates blogs on a variety of subjects. This a great place to see who are the leaders in niche along with thousands of others, that are trying to come up.
You can also see the Top100 Blogs and review the niche.
Flippa- Online market place to sell and buy websites. This a great place to see how much a site is worth. Look around what is being sold for how much. Open up site listing, details of site from pageviews to revenue is display, this would help you to see the potential for a given niche.
Domain Registration - Tap into what all domains are being registered to get a understand of latest trends.
For commerce based niches you should check
PayPal Stores - Hundreds of retailer participating in Paypal programs and given the customer incentives on using Paypal.
Ebay.com - Hundreds of successful stores, each different in some way leading a particular niche.
Google Checkout - Similar to Paypal Store, but by Google, where retailer gives the customer incentives on using Google Checkout (Shopping Cart) .
Amazon.com - Thousands of Items sold daily, check out top Items that are selling.
Clickbank.com - This market place is for affiliates promoting/selling their products. Look for amount of referral fees being offered for various products to understand profitable niches.
All of this research that you do would certainly go a long way in making sure you identify the correct niche and the idea you want to proceed. So don't be shy and give you best.