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Although I don't think hyphens are the greatest, most people recognize them much more than a .co. Most people don't even know that .co exists. Its only natural for us and almost all users on the web to type ".com". Thats just what we're used to and have been trained to do for the last 2 decades or so.
Maybe in another 10-20 years and after tons of marketing from many companies that switch to .co would it be a good idea to go with the .co. Otherwise I think you'll be giving away a lot of traffic.
But I think it would also depend on where your driving your traffic from. If its anywhere and everywhere I still vote for .com just for the sake of miss-typing. But if its mainly ppc and online and you get them on your mailing list I don't think it'll matter and the .co would be fine. If they found you on a search engine via SEO or PPC' or they're visiting your site from a link from your follow up email it really won't matter and the .co will work perfectly and you won't have the ugly hyphen.
Not to mention I'll sleep better knowing you don't have a hyphenated domain name... lol :-)