LoSec has been sold as the "pirate haven" in EVE. You can engage anyone here, on gates, on stations, belts, missions, anywhere. But that engagement comes at a price, everywhere. Hostile action reduces your security status, and podding your opponent reduces it even further. But beyond that, ship combat in LoSec is fairly wide open. A few things to keep in mind is that Titan Doomsdays, Bombs, and Interdiction spheres (bubbles in general) don't work. This (along with the pervasive security status hit of combat) are the big differentiations between LoSec ship combat and NullSec ship combat. In addition, the existence of sentry guns at stargates and stations means frigate combat must occur away from these public areas. Battlecruisers (and even cruisers) can tank the gate or station guns for a while in LoSec, but
frigates and destroyers will pop quickly to the nearly perfect tracking and signature radius of these guns.
The markets in LoSec are poorly represented. Sure, some residents run missions, and some may even sell their loot on the open market, but in general the market in LoSec is weak. With less than 10% of all pilots in EVE residing in LoSec, and easy access to HiSec markets and trade hubs, there isn't a lot of profit in the LoSec market. Not to mention the fact that eventually someone will manage to destroy your hauler on the way in or out of a station or system, means that the market in LoSec really needs to be a self-sustaining one to be viable, and with the low population it just isn't. Most items are priced closer to NullSec than HiSec, and are "emergent" purchases rather than planned ones. There was a move a while ago to change this in Intaki - but I haven't heard how successful that was. If you know, I'd love to hear about it in the comments.
LoSec should be the haven for the majority of planetary interaction. With increased returns and the ability to install player-owned customs offices (pocos) there should be significant competition for resources here, but this doesn't seem to be developing as well as it could. Most corps that are installing (or killing) pocos are doing so fairly unopposed, although some fights are happening over pocos, a flight through a losec area of space will still contain more Interbus customs offices than pocos.
Issues with LoSec PvP
I think the biggest issue with LoSec PvP is perception. PvP happens a lot in losec, and recent reports by CCP Diagoras support the fact that ship combat in LoSec is alive and well. However, the volume of actual players in LoSec suggest a much higher concentration of combat than experience (living in LoSec)
There's a proposal on the official EVE forums about this, and it's not bad.
My biggest complaint with most LoSec proposals is that they are focused almost exclusively on Faction War or Piracy. Both of those are valid activities, but LoSec industry is just as valid, if even more difficult to work with. Reactions, R&D, even mining in LoSec should have some validity, with an appropriate risk:reward balance.