Interesting article from the Chicago Tribune regarding the domain name Chicago2016.com. Turns out some guy bought the name 2 years before the city put in a bid to get the Olympics there in 2016. Now, they want to force him to give up his legally registered domain name because, as they say in a quote "It's our rightful name".
I think domain squatting is sort of bottom-feeding activity (just my opinion...yours may and probably does vary), but it's not illegal. The guy bought it 4 years ago and dutifully renewed it each year. It is *his* domain, regardless of his motivation for having it. Simply wanting it does not, IMO, grant the City of Chicago sufficient rights to take it from him.
I'll be most curious to see how that turns out.