Define competitive keyword? How many pages must exist for a keyword before its considered competitive...
Don't forget - Google doesn't care about paid links that are solely for traffic. It's links that pass Google juice that you'll get into trouble for. Personally I don't think buying such links are worth the risk - Google are such an enormous player that getting a site penalised by them would hurt!
Natural link building will get you the best results, but you have to get some revenue as well.There is nothing wrong by selling advertising space on your site.Many who sell text links from their sites use the "no-follow" tag.
The buying links process should be in a natural way and combined with other link building techniques such as article submissions.
linkbuilding is very important, and I think you need to use every method available. (Well, no black hat ofcourse)
Competitive keyword in my mind would be keywords with over 100,000,000 results.. Obviously, the higher the results, the more competitive the keyword is... Single broad keywords. Its interesting to take a close look at everyone's back links and if they are natural or not. -Alf
If you would be afraid of Google and try to ammend on everthing they say then you won't learn. Since they are so big that Google is finding it hard to penalized tehm. they are being followed by a lot of people. As John Chow already said "let the people follow you and then Google will follow".