The only thing you're supposed to do is write 50,000 "new" words of a novel.
There are rogue NaNoers who'll write nonfic or short stories, but still with that 50k goal. There are writers who will write ahead of NaNo, then use that writing to jump-start their NaNo project. You can pretty much do as you want; no one is going to check your work against your word count. You could write absolute gibberish and it'll still count toward your goal.
While I've done NaNo in the past, I find that its goal and my writing style (I edit as I go) are at odds with each other. I much prefer the twice-yearly Camp NaNo, for which you set your own goal. There's also the added option of being placed in a "cabin" with other writers. You can form a cabin with friends (there's almost always at least one AW cabin for Camp), be assigned to a random cabin, or opt out of being in a cabin. It's up to you.
Once upon a time, they said that to do NaNo right, you had to start a new novel. And I like to recommend that for newbies, even now that they've changed the rules, because I feel like the big build to NaNo is much better when you're revving up for something new (or something you haven't worked on in a long time), rather than continuing something you've been working on for the months leading up to NaNo.
However, in reality, I recommend working on whatever is exciting you. Whatever state it is on day 1 or how salable it'd be in the long run or how many drafts you'll have to do in the future. As long as you're motivated, go for it and have fun!
Really, as long as you're satisfied with how you get those 50,000 words, you're good. The point of NaNoWriMo is to get people writing and show them how to do so regularly and repeatedly. So cheating at it is like cheating at solitaire.