I invested in namecoin and if I sold them all at the current ask price then I would have tripled my investment.
It's a good hedge against BTC. As BTC price goes down, NMC price goes up. But it's even better than being that simple, because NMC difficulty catches up faster, so NMC value goes up in that way, too. Basically NMC price will most likely go up no matter what, with a bonus if BTC goes down. Instead of selling BTC for dollars, I think it's better to sell BTC for NMC. Especially since the next difficulty will be 4.6 times the current one and will start at an estimated time of within 24 hours.
For diversification, I spent some of my BTC on NMC. That way I'm not totally bummed out when BTC goes down. I'm confident BTC will go up in the long run, but it makes it easier to deal with the swings.