A Google Webmaster Help thread has one webmaster being a bit obsessed about making sure Google does not know he has affiliate links on his web site.
He is under the belief that once Google figures out his site links out as an affiliate, Google will automatically downgrade the site.
Over the years, webmasters have come to learn that affiliate sites are hard to rank in Google. But why? Is it because they are linking to other sites that sell the same product? Or is it because the content is often not unique?
Google's John Mueller said in a Google Webmaster Help it is because of the unique content not being there. John wrote:
Generally speaking, using tools like that to obfuscate your links isn't something that we'd worry about. That said, it doesn't change anything from our point of view: Our algorithms expect unique, compelling, and high-quality content on your site. Whether you're an affiliate or not, it's important to us that users are able to find what they're looking for on your site -- otherwise they might be better served by having the final destination in our search results. It doesn't matter so much that a link is an affiliate link, or where the ultimate target is (and with that in mind, it doesn't provide any additional "SEO" benefit to hide that from search engines), it's really much more about the additional value that your pages add.
We have more about affiliate programs at http://support.google.com/webmasters/bin/answer.py?hl=en&answer=76465 & in general about duplicate content (a common problem with many affiliate sites) at http://support.google.com/webmasters/bin/answer.py?hl=en&answer=66359.
Personally, given that hiding affiliate links like that is not going to sway our algorithms, I'd try to avoid those kinds of games (with the associated maintenance hassle) and instead spend time working on the website overall.
This is pretty obvious stuff but when SEOs get so deep into their daily grind, they don't always step back and look at the whole picture.
As a side note, I'd nofollow affiliate links just to be careful.
Forum discussion at Google Webmaster Help.