The Erg is a vast desert. There may be some oasis' there where a city or two may thrive, but largely it's just an empty, desert wasteland. In terms of habitability, it's a rough place to live. However, hidden beneath the desert sands may be the ruins of ancient civilizations, meaning there are people who would be willing to risk venturing into the Erg in search of treasure and/or Archeo-tech.

EDIT: I should point out though, that because the Erg is situated between the Rainlands and the northern lands, any city set up there would be in a prime spot for trade/caravan stop. Meaning that although it's a desert and deserts tend to suck, you'd have a lot of goods rolling through as passing caravans stop by to rest and trade.