There is a bit of a catch 22 when attracting illegal dealings to bitcoin. This catch 22 exists on multiple levels. The highest level being that even the medium sized players would need a lot more value to the bitcoin to be interested in participating. Currently, it's like taking micro payments to these types. I think there is a total value of about 150 million dollars? This would need to be in the billions to have enough to go around to satisfy all the players who think 10 million dollars is an average take.

Here are some suggestions for the illegal side.

Getting Kim DotCom on board with bitcoin will probably drive the price up more than The dread pirate roberts has.
While not really illegal, the porn industry probably hates chargebacks. They could offer lower rates to people who pay in bitcoin.
Money Laundering.
Rainy day legal defense funds.
Political bribes.
Credit card theft, turn the stolen funds into bitcoin through forexes that pop up and disappear.
A bitcoin fencing operation... buy stolen goods for bitcoin. Operates like a silk road for stolen televisions.
a bitcoin based cash for gold for stolen jewelry. (cue south park audio byte)
Identity theft. Buy a new identity with bitcoins.
bets for video based blood sports like cock fighting and dog fighting.


Shit I could do this all day. There is a zillion things that are illegal that could benefit from bitcoin... but all of this shit is moot - it will take nearly a full generation before the majority of the population has the computer skills required to participate in the bitcoin process. The drug buyers are somewhat used to a certain level of scammery and taxation... They get taxed when they buy their drug coins on eBay and they get taxed for the privilege of buying their drugs in a safer online environment. There aren't many dinosaurs like me who have the computer skills to even set up tor.