dogbite,
Yes, it is perfectly legal. Thousands sell everyday. You do not need a lawyer, although if the dollar amount is high enough, you may wish to contract with one. The problem is that, since it is such a new area, most attorneys are clueless.
In any event,
use an escrow service to handle the transaction. It is worth every penny of the fee (usually between $250 and $500) to make certain that you don't get screwed. This also protects your buyer.
Register.com has an escrow service, and they are VERY experienced in the domain business.
Russ, NCNE