Matt Cutts has gone on record again stating Google's position on paid links. Most websites' Page Rank went down when G did their last tool (fool) bar update. Many people are speculating that the drop is from Google devaluing paid links.
Matt seems to be recommending that all paid links should be nofollowed (if a site wants to do well in Google).
http://www.seroundtable.com/archives/015822.html

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