this current article and comments by Matt Cutts (publicist for Google) on paid links being reported for buyers and sellers is quite interesting:
http://www.mattcutts.com/blog/two-search-tidbits/
"By the way, we?re currently caught up on paid link reports, so if you know of sites (maybe in your search niche) that appear to be selling or buying paid links that pass PageRank, it?s a great time to let us know. Use the authenticated paid link spam report form and someone will investigate the report. We?ll be concentrating primarily on the sellers, but if you send us a site that appears to be buying links that pass PageRank it?s trivial for us to look up all the backlinks"