[sweetjazz]

I play lower limits (2/4 full currently), but I am in a similar situtation regarding my playing schedule, primarily playing late night when there are a lot of bad players online.

I find that I make a lot of money by being able to frequently sit at a table when a player is playing way too overaggressive, often maniacal. I have learned how to adjust my play to this situation (and am still learning!). The overaggressive player almost always burns through the $100-$300 he has at the table. I am able to get a nice profit by observing how much of a chance I have to isolate this guy and how much of a chance of I have to build a big pot with my premium hands by getting into a raising war with the maniac while weak passive players call each raise.

There are so many errors being made by opponents that:
(1) I can make way more at a table like this than I could at a table of halfway decent players, even if I had extensive knowledge of their betting habits
(2) I can make a huge profit even if I occassionally make some mistakes. (Not that I use this as an excuse to keep making the same mistakes -- but it's allowed me to experiment a bit and learn quite a bit while still profitting tremendously.)

Yes, the variance is significantly higher, but so is the EV of playing at the table. This makes a huge downswing pretty unlikely, provided that you are doing a reasonably good job of adjusting to table conditions.

(I also regularly find games with horrible loose passive players, who are also quite profitable. I tend to like playing against uberLAGs or maniacs more because often the otherwise marginal players who play more or less tight preflop and according to simplistic rules postflop can be exploited quite a bit more in this type of game.)

Like the other posters, I can't quantify how important game selection is. But, once you know the basics of poker and can implement the ideas in Small Stakes Hold 'Em fairly well (when appropriate), game selection is by far the most important skill needed to maximize earnings.

I don't know where the donks keep getting their money to play poker. I only know where their money goes as long as they keep playing.