Hope adsense is making itself better day by day. This will really help dvertisers to get more people. Link to the POST. http://adsense.blogspot.com/2007/02/now-on-adsense-ad-format-near-you.html
I believe I started seeing those late last year (like in October or may be November) Google Checkout is having a really hard time taking market share over from PayPal though.
Not strictly speaking. Checkout is more focused on merchant sites and allows sites to accept credit card payments. It doesn't have the functionality that PayPal has of sending money to another person (person to person transfers).
Well... it's a deal you sign I believe you have the option not to do so. But they give you Free AdWords money (like 10% or something) if you use Google Checkout for every purchase that occurs. I say it's a good incentive program. The problem is that PayPal has such a huge market penetration that it's virtually impossible to replace them... EVEN if you are Google.