My thoughts are that this will lead to less click fraud if you only limit adwords to Google search rather than content (adsense).. anyone else feel the same way?
Although the content network can send your some fraudulent clicks, it is always best to test it out at least. I usually start with it turned off and then when I feel I have almost reached my potential on the search network, I will test the content network. You might also want to try setting up a separate campaign with content network only so that you can see how the traffic is converting. It all comes down to the conversions. IF you are making money on the content network, don't worry too much about click fraud. You will still be better off paying for those invalid clicks than if you hadn't tested the content network at all.
Click on "Edit Campaign Settings". You'll see the option there. Now that you can easily see content network activity it's a whole new ballgame.
I dont think it really matters. I think it depends on your niche and where your getting the most traffic from...either search or content. I have had a few click fraud cases before and have been proven wrong. Google is just a humongeous network with a lot of traffic hitting in all over. I dont think it will make a difference as far as click fraud is concerned.
I recommand content off. I have so many uselles clicks from sites where my ads appear near the submit button in a directory or some other deceiving ways if you make a good campaign, the search network will be far better just my experience though