Well, that seems to be the question over at Google. Matt Cutts has posted a couple blogs about paid links and how Google will be working on detecting them and figuring out what kind of impact they have on Google's search results. I'm not going to go into the details, just my take on things, so for more info, you probably want to shoot over to Matt's posts about reporting paid linking and hidden links.
I am in no way an expert on these things, but I like to think I'm getting more SEO savvy as I go, so this is my basic understanding of the situation:
First, the number of sites linking to yours have a large effect on you ranking in Google search results (but it's not the only factor by a long shot). So, if you can afford to buy a ton of links, congratulations, you'll rank #1 for your keyword(s). Now obviously, that sucks, b/c all it means is the sites with the most money will fill in the top ranks in Google. Google wants to make sure that doesn't happen (good for them) hence them requesting that webmasters NOT use paid links as backlinks, since technically, they're not "natural" links (no matter how relevant the site you're paying to link to you is to the subject of your own site). They would like paid links to be reported or for the linkers to put the nofollow attribute in the link coding so the spiders won't count it as a backlink. (You still with me here? I know the terminology gets old).
So if a webmaster does THAT, it means the paid link is strictly to get traffic to your site, not to help your ranking in Google search results. My honest opinion? That's bullshit (excuse my language). If I'm going to pay for a link, I want the best of both worlds. I want it to help my ranking AND get me more traffic and I don't care who knows it. There is nothing wrong with that tactic - when used in moderation.
It really always comes down to moderation. Should you purchase 1000 links to get ranking on Google? Probably not. Should you purchase several well researched, relevant links to both drive traffic and help out your rankings? Why not? You have every right to do it, and I don't see that as being "black hat" SEO tactics. Maybe a bit on the grayer side of white, but what of it?
Personally, I think Google is getting a little high handed - which doesn't surprise me, given the fact that the online community are the ones that gave them all the power. People - Google is not a monopoly - there are plenty of other search engines out there - not all are as good as Google, but they all have their features.
Don't get it twisted - I still love Google - it's the first SE I go to when I'm searching - I just don't want them to get too much of a God complex going on when it comes to the rules of determining what should and shouldn't be done when it comes to SEO and getting your website ranked on search engines.
Rather than try and do away with most paid links by getting them reported - why not figure out a way to separate those who use paid linking responsibly, from those who are just taking advantage. Granted, might be tougher than I make it sound, but Google's got a ton of great minds - I'm sure they can come up with something fair.