The most important thing which I should mention regarding home based Internet businesses is to
avoid scams.
Scammers are
constantly trying to rip off people who want to work from home.
If you are asked to pay money to participate in a program or become an affiliate -- run like hell.
OK, with that said -- on to your question!
The home based Internet business which I know the most about is web publishing. In a nut shell, you create web sites and sell advertising on them.
An alternate approach is to create a web site which sells products directly. For example, the site
Totally Birds sells pet supplies online.
Many online stores are actually affiliates. That means that the entire sale and delivery is handled by another company and the affiliate is paid a small fee for making the sale. The best affiliate program is probably
CommissionJunction. CJ has thousands of affilliate programs to choose from.
A relatively new option for making money online is
PayPerPost. If you have a blog, you can get paid for posting about advertisers products on your blog. This will probably motivate more people to setup blogs!
If you don't want to build a web site or run a blog, you can also make money as a paid forum poster. People with new forums often pay forum posters to get their forums started and make them look active.
The types of potential home based Internet businesses seems almost endless. I hope other forum members respond to this topic with more ideas!