Pretty much few months or so, we get a new huge debate about paid links, just look for yourself.
This one was started by Danny Sullivan's Official: Selling Paid Links Can Hurt Your PageRank Or Rankings On Google article.
There is no doubt that selling links can hurt you, I am a believer of that. That is why I am also a strong believer of clearly labeling your sold links to the end user. If a user can see that they are clearly paid, I also believe a search spider can be smart enough to figure it out and do what they want with it.
There is a large discussion brewing on Danny's write up at WebmasterWorld. The discussion is exactly similar to the past. Some are angry, some are happy, some people are saying I told you so, some people think Google is going to far and some people are simply confused.
My thoughts on this topic are clear. Label your ads for the end user. Search engines have always said one thing over and over again. Do not think about the spider or the search engines. The search engines say, just do what is best for your web visitor and they will take care of the rest. So, I personally go by that. Am I right? I can't say but I do my best.
Forum discussion at WebmasterWorld.