Nothing that goes too far in extreme works well. Buddha said it over 2,500 years ago that the middle road is best...so, Gray Hat tactic rules!

During the Google Dance '05, I asked Matt Cutts what Google was doing about all the black/gray hat sites dominating Google at the time across various verticals. He responded, "Your telling us about such tactics & websites are very helpful/crucial in our efforts to battle black hat SEO'ers."
"I don't want to have to tell you guys about black hat SEO'ers. You're Google, after all. You should find them and stop them please! Their success is only forcing White Hat SEO'ers to move into the gray"
"Your help is so important...yada yada"

Since then, I've only seen more Black Hat tactics evolve into the blogosphere & world of link buying/Googlebombing. Should I really spend my time blowing whistles on sites when I would rather improve the sites of my clients?

Until there is real enforcement by Google (and Yahoo if ever, not to mention how far behind MSN still lags), the economics will force white hat SEO'ers to move, no matter how ugly & painful it may be. The "truth" that good content will earn more powerful links and be ultimately successful seems depressingly idyllic. Meanwhile, competitive research becomes "reconnaissance", and the weather becomes even more gray--at the expense of White Hat SEO!