good article i've personally reversed the flow for myself. i go where all the money is being made in bigger niches because I use cpa networks for traffic and well.. small niches don't make money there. For ppc and seo this is a good article
another few ways to pick your niche is to search out magazines, bestsellers of books on amazon, ebay pulse, google hottrends just to name a few.
Finding niches involves massive amounts of research into keywords, advertising$, ppc rates and analyzing the traffic potential first. If the niche has no searches or poor $ppc then for me it's not worth going after (unless there's a great affiliate system in mind) . If something comes up after this research then I analyze the top 100 keywords for competition and find out what is involved in getting top ranking... how many links, type of content, etc. Save time by going after the niches with high earning potential, nice traffic, and little competition. You can't find this out just by brainstorming on your own.