I think first you need to be honest with yourself and ask a few questions. Are you a motivated self starter? Are you organized and able to set aside a dedicated area in your home for your "work"? Can you set aside a certain time without interuptions to do your work? Working from home is great but too many people don't realize that you are bringing your job home, expect to make money and then don't make the same commitment to it as if they were showing up for a 9-5 job. It doesn't matter what you are doing from home, if you can't meet the above, it will be a long hard road that will more than likely frustrate you into giving it up along with so many others. I didn't say that to discourage you at all. Only to bring out some hard facts that need to be looked at honestly, that may not have been brought to your attention yet.
Next, what to do from home. First thing I would ask is what are your passions in life? The majority of people who are not doing what Pete mentioned and are succeeding (i.e. paying their bills and they are content), are doing something that involves their passion. Which could still be a service or it could be product oriented too. To give you a few ideas the most popular is selling on eBay and it isn't nearly as hard or complicated as some people make it out to be. We have done our share of it, made some money, and still do some here and there. But we are in no way "experts" on it. I would refer you to a gentleman by the name of Skip McGrath who we received most of our knowledge from. He is here in the NW and gives straight forward "raw" knowledge that you will need to take and make your own. He is also reachable to talk with in person and not lost in some huge corporation just peddling opportunity books and such.
Next would be direct sales companies. There are many good companies out there with great reasonably priced products who utilize independent distributors to move those products. Now if the first and only company that comes to mind for you is Amway, you need to do a LOT of research. This marketplace is so much bigger now. To let an individual's impression of one company deter you from the whole picture would be a grave mistake on anyone's part who is seriously looking for an income source they can manage from their home. Once you find a company that interests you don't just jump in. Use the interent to research them extensively, including finding out who runs the company and do a search using that person's name.
The next thing I would recommend may sound a bit corny, but you need to work on yourself too. That is, start taking a look into good selfimprovement/motivation books and or tapes. Some great authors that come to mind are Stephen Covey, Zig Ziglar, and my personal all time favorite Og Mandino. Look into becoming a member in your local chamber of commerce and start associating with other business owners. Many chambers also have leadership courses and small business development courses too! If your town is fairly small like ours (Dayton) and the chamber there isn't large enough to have anything that I mentioned, find the next closest one in a larger town where you frequently shop and such that does. You can also look into courses from Chemeketa online too. These things can, and need, to be done before you start your endeavor and all along as you are running and growing your business.
So there's my

adjusted for inflation. As you might guess we have a pretty extensive background in the "work from home" area. We need to with having 6 children that we want to raise ourselves and not pay a daycare provider to raise them for us. That means we need to stay a "single income" family with one of us working fulltime for pay and benefits while the other works fulltime with the kiddies. If you have any other questions we'd be happy to share what we've learned over the years. Best of luck to you and I hope this helps!!