2. Squidoo had tier system for making money. Every lens had its own lensrank, calculated from many factors: freshness, traffic, sales, outclicks, time (visitor's) spent on lens, ... In general quality and quantity of traffic guaranteed high tier position. So you could earn money even without selling anything. This money came from advertisers.
3. Selling stuff on Squidoo was easy. There were numerous selling modules available (Amazon, Ebay, Zazzle...) and you could also place your own affiliate links in text modules if you had basic html knowledge.
4. You could sell lenses on Squidoo. It was extremely easy. You only needed to push a button for transfer a lens from your to somebody else's account. Or you could buy a lens. Prices vary. I have seen lenses for 3 and lenses for 3 thousand US dollars. Fresh lens, made from scratch is in general cheaper. Well matured lens with good backlinking background and a lot of already made sales and high tier position could be a real money maker, so price is higher.
Update: on 28 February 2013 Squidoo turned the ability of lens transfer off. There were still ways to buy or sell a lens but now they are much more complicated.
5. You could support your on-line business with Squidoo lenses. With presentation come powerful links and I had used Squidoo mainly for this purpose.
Before I discovered this site, my e-store was about 100 in SERP for my main keyword and nowhere for others. Now it is on first page for all keywords and I have several number one positions, in one case for some time I even had first seven positions for one longtail!
Update: on 28 March 2013 Squidoo made all links pointing out of Squidoo nofollow. This drastically reduced the site's potential for SEO purposes. But there was I trick I discovered only few days later - links from modules called link-list stayed do-follow until Squidoo closed. Same was true for links from profiles until July 2014, when the ship was already full of holes. I can reveal the secret - I learned the tricks of the Squidoo structure so well, I managed to build PR5 links in less than two days, what greatly helped at promoting of my blogs. None of so called SEO experts used this tricks, because none of them spent so much time studying the structure.