Marie Claire wrote at David Harry's blog a technical piece named Hunting for paid links; a technical review. In that piece, he goes through some of the ways a search engine may detect paid links. As many of you know, the topic of buying links has been somewhat controversial over the past couple years. There is no doubt in my mind, that Google has become very clever at detecting these links and devaluing many of them. So, as an SEO, it can hurt for you to read some more technical documents on the topic.
In Marie's post, he goes through various detection mechanisms, he talks about machine learning, discusses some academic papers, and looks at link qualifiers.
There is some very positive discussion around his post at Sphinn. So if you have a theory or two on how Google or other search engines currently or may detect paid links, join that discussion.
Forum discussion at Sphinn.