Expired domains are those domains which the owner has forgotten to renew. These domains have pagerank as well as pages indexed in Google. So why do expired domains rank fast and high in Google? Well such domains are trusted by Google and so they rank quickly compared to a newly registered domain. And these sites are immune to the google sandbox and more resistant to getting de-indexed ....even when you are hammering them with relatively low quality back links.
Domain drops is one factor that only knowledgeable SEO professionals check before they decide to buy a site. As you know if the owner of a domain doesnt renew his domain on time, its status is set to expired. This is the period after which we as expired domain hunters, pick these up. If a site is not picked up in this time period, then domain's status will be changed to a redemption period and its whois info will begin to drop. A rule of thumb is that if a domain has been dropped more than twice in the past, you dont buy it.