Great post Frank. We need more examples of Social Networking success.
I have a bit of experience with Ning and to answer Angela's question yes there is quite a bit of overlap between it and a traditional membership site but there are ways that the two can work together.
1. Market research. Since it's ridiculously easy ,and free, to set up a Ning for your niche you can use it to gauge interest without having to invest a lot of time and money.
2. If you're considering charging for memberships you can use a Ning for free introductory level content and a membership site for premium content. Build a base following with the Ning then set up a pay for access membership site. Ask the members of the Ning what premium content they would pay for.