yes. still doing it. why not? one thing i notice is that adsense does not seem to like traffic from adwords, but it does like some other SM sources like yahoo.
This seems to come up so often. Google does not mind you sending AdWords traffic to you AdSense site. I wrote a post on this yesterday: Using AdWords and AdSense
No, you won't get banned. If this was the case then every site that has adsense and uses adwords for promotion would get banned. As long as you send targeted traffic you won't have any problems.