Smub, i find the notion of paid links being penalized as one that does not hold water.

Reasons, tell me why if this was the case G would allow advertising such as "Buy links here" on their advertising medium such as in DP ?. surly you can not say something is wrong then allow your own network to promote it.

Next it is ( in my mind ) not so much the link but how it is portrayed, even if there is a way to monitor this, IE buy a PRXYZ link seems like yes your just selling links but to say advertise or sponsor a section is OK, i can supply hundreds of examples where everything is OK. so rather than look at it's just no good , look at the way it's sold.

I will also put forward how stupid this line of thinking is in that if anyone believes that any so called natural linking ( if this is what people wish to think is the correct way ) will go black market and underground where so called natural links are still paid for.

Smub in addition to all of the above to strengthen the it's rubbish theory, is all of the ad networks popping up, everyone is a paid link, some one pays to run that link, all of the affiliate networks, which are very popular, are people saying these links displayed by the affiliates are not paid ?
All of the yellow pages type directories showing links, are these not paid ( in most cases dearer than any normal directory ) and we can go on and on with examples.

I will put it this way, if there is some sort of rule book that 100% describes what is right or wrong by any company, be it G or any other SE then post it up and we can abide, but for now all people do is act like lost sheep based on Chinese whispers.