Lots of interesting market posts out there. <a target="_blank" href="http://mjroseblog.typepad.com/buzz_balls_hype/2006/06/to_market_to_ma.htm">MJ Rose discusses writing to market</a> and whether you can do it without selling out. (To which I say a resounding YES.) <a target="_blank" href="http://www.lydiajoyce.com/blog/?p=346">Lydia Joyce has numbers</a> on making a living at writing, interesting reading although it does make me think of that quote "lies, damn lies, and statistics". Because while it can help give you a picture of publishing, the individual factor is much harder to pin down.
Anyway. Writing to market. Here's an example from my own experience. I pitched three projects to St. Martin's. I wrote synopsis on the first two. One was paranormal, one contemporary. All three projects were books I want to write and feel enthusiastic about. (I will write the other two, have written 1/3 of one and will sell them elsewhere if SMP doesn't want them.)
The one that sold was the contemporary. If you look at my booklist, I have about a 50/50 split on contemporary and FF&P. Well, the numbers are skewed now I think in favor of FF&P. But the point is, I like to write both. It's not selling out to write the contemporary, because I love that book, too.
I think the key to writing to market without being a sell out is very simple: don't pitch or undertake anything you don't really want to do. When I see somebody holding their nose and saying "erotic sells so I'll do that, it'll be easy, those books are so badly written the publishers will buy anything" I know that writer is going to have one of two outcomes. Complete failure, or a complete change of heart with the discovery that by God this erotic stuff is fun and I'm pretty good at it!
You can't succeed doing something you hate. Period. If you hate the genre, the readers and the publishers and the other authors, give it up and move on. Find another market segment that resonates with you. Publishing is huge, there's something somewhere to get fired up about that will sell.