Mercenaries ("Mercs") are players who have decided to fight for money, rather than traditional methods such as Professions. Although primarily an RP thing, anyone who accepts cash for non-material goods on a regular basis can be considered a Mercenary. Rogues and Warriors might seem more inclined toward Mercing than other classes, but any class can be a Mercenary.
The sole requirement of being a Merc is that they are worth being hired, since free is a hard price to beat. There are different approaches to this problem, each distinctive in strengths and weaknesses.
These are the simplest type of Mercenary: They are hired because they are better players than someone that could be gotten for free. They, unlike Level or Gear mercenaries, are able to sell their services to almost anyone, as they are not dependent upon being a higher level or having better Gear than those hiring them. Most commonly used as a little extra kick on an otherwise shaky Raid, or as an escort through dangerous territory. They are (Usually) better at the former than the other two kinds, as most Skill Mercs require more cunning than their kin. Their primary disadvantage of a Skill Merc is that until they reach end game, their market is limited to those of their level range. This being said, it becomes obvious Skill Mercs aren't exactly ridden with flaws. They have the largest Market of all Solo Mercs.
The most common kind of Mercenary, the Level Merc depends on being a higher level than their employers. Mainly used to run through instances. The primary disadvantage of a Level Merc is low profits: They only appeal to those a lower level than them, and as such at lower levels they have a very small market, and unless their employer is a funded alt, they receive low pay in comparison to their level. They have the smallest Market of all Mercs.
In practicality more or less the same as a Skill Merc, a Gear Merc depends on being better geared than whoever is paying them. They are more or less Twinks that get paid, and for this many see them as less skilled, even if better combatants, than the employer. The Gear Merc's biggest weakness is that they must spend most of their earnings towards obtaining and maintaining their gear. Their market is limited to jobs that would not normally be taken on by someone with the same or better equipment as them. They have the second smallest market of Solo Mercs.
The Group Merc depends on others, they belong to a group of other Mercs that will be able to take on jobs they could not individually accomplish. This group is usually referred to as a Merc Band, or Band for short. Bands can be composed of any of the above Mercs, or simply of Players that prefer numbers to Gear, Level, or skill. Bands are used as muscle in groups and raids to lower the player count, therefor increasing the xp and gear split between the group. Since there is strength in numbers, the only times when a Group Merc setup would not be optimal is when the employer wants a little help grinding, or when the level limit is beyond their capability. Large Mercenary forces have been hired in the past by kingdoms to defeat opposing factions, though it is rare for such forces to be used. The biggest weakness of group Mercs is that they must split the pay amongst themselves, meaning that there is only a fraction of the pay to each member. Although the fact that the jobs are usually bigger than Solo Mercs, thus increasing pay per job, offsets this to a degree, more often than not a Group Merc finds themselves working harder than most Mercs for their Gold. Group Mercs have the largest market of all Mercenaries, and are likely to see more action.
Although Greed is always an incentive to a Merc, more often Mercs will hire themselves out because it's a more interesting source of income than farming resources for professions or running dungeons for sellable gear. In fact, Mercing probably pays less than the aforementioned methods, simply because most Players do not hire Mercs on a regular enough basis for there to be a thriving market.