First off, if they ever go in this direction, Twitter needs to be very careful with how they go about it or else they will lose their loyal users. Maybe they could add a preference setting that allows you to filter out posts related to buying and selling items, similar to the new Filtering feature on Flickr. They might also want to offer a Mature filter to keep out the seedy stuff. I could see some very cool mobile applications built around this. Imagine going to a sold out Arcade Fire show and using Twitter on your mobile phone to find people who are trying to unload unused tickets at the last minute within 0.5 miles of the venue. I would use that.

How would Twitter make money on this? They could charge the seller a fee for showing the For Sale tweet in a prominent location. Or go the craigslist route and charge a fee for real estate listings, job postings, etc.

12/29/2008 Update:
A service called Tweebay just launched a few days ago. They allow you to post items for sale on Twitter. I haven’t had a chance to look at it closely yet but it looks like an interesting concept.