I did some of this once… back in the days when Quark was the thing to use. Hopefully someone with more current experience can chime in.
Some answers:
There are plenty of people who do it regularly. Most of them probably do other graphic design, editing or creative services. Very few clients are sophisticated enough to go looking for desktop publishing alone and very few need just that piece. It’s more likely that they’ll need it as part of a larger branding package.
As far as I know, Publisher would only be used if the client made that a condition of the project - it’s just not very good. Most use InDesign now, having replaced Quark. (I believe only MySpace is ahead of Quark in the competition for “former industry leader is now a forgotten has-been.”) Anyway, Adobe’s Creative Suite is probably a good idea - most clients will want projects that will require Photoshop and/or Illustrator as well.
Most clients will have you send a file to them or directly to a printer. Your contract should state what kind of file they get. I think most designers provide a finished image or PDF, but do not provide all of the source files. (Thus, the client will come back to get updates). The more source files the client asks for, the more they should pay.
I’m not sure what the biggest markets are these days, but most jobs are geared towards advertising. And, as I said earlier, most people get these things done as part of a larger branding project. They’ll probably want a logo, website, brochure, and business card all at once. But… there are niche markets for all kinds of things.
I’d agree that InDesign is the default page layout program now, and you would probably want to be trained on the whole Creative Suite, so you could create graphics in Illustrator and tone photos for print in Photoshop also. Microsoft Publisher documents are not used at all in the professional space, and if you needed to send a document to a printer, for example, I doubt most places could even read them.
As far as the market itself goes… there’s LOTS of people out there trying to feed themselves and keep a roof over their head by doing this sort of thing. I considered setting up my own freelance outfit along those lines after I got laid off in 2008, but I think you’ll find it’s a lot harder to drum up business than you might assume.
Desktop publishing is one of those in-between skills, and you’ll find the competition to be fierce. Most copywriters have at least a basic knowledge of it, most graphic designers offer it as part of their overall design package and most printers will do it for clients (for an extra charge of course.) Creative Suite is quite a bit more expensive and harder to learn, but it does a lot more than Publisher, which is why the pro’s use it.
Publisher may be okay for basic stuff like flyers and simple brochures and newsletters, but those are the kind of projects a lot of small businesses do themselves and print out on the office printer.
If you decide to go with desktop as a business, I’d recommend getting familiar with local printers, and work out a deal where they’ll give you a wholesale rate. That way you can give the clients the finished product with a discount on printing they couldn’t get for themselves.