The subject of paid links is taboo in SEO. Speakers at seminars whisper when they talk about the subject at conferences and even then they usually disclose they are against buying links lest Google´s wrath fall upon them.
However, paid links, either directly or indirectly, are a major part of the cyber economy without which the economic recession would probably be even worse. How many work at home mom bloggers can feed their kids thanks to paid online advertising?
Paid links work. That´s why companies are willing to pay for them. In most cases the links are relevant and useful to users. I would rather see a relevant text link on a page than have one of those giant poker or car ad pop-ups invade my screen and I´m sure you would agree.
If you´re selling links make sure you hold your advertisers to the highest standards possible. If it looks spammy, don´t put the link up, if the link doesn´t help your site´s visitors don´t put the link up, if you don´t vouch for the advertiser don´t put the link up!