Things have gotten better now, and millions of people have interacted with t.co, the Twitter shortener, Vine, etc., which means that .CO isn't quite as "underground" as it used to be.
I think ultimately the choice of TLD should be related to other branding decisions in that you consider your market first. So if you are pursuing a group that's very internet savvy, or startup savvy, they've probably heard of .CO and you can use it freely. (Likewise, you could probably use an unusual/industry name)
But if you are going after people who aren't familiar with URLs or domain names -- or maybe can't even discriminate between an email address and a domain name -- you'd be better off going with the safer option.