Practicing “white hat†SEO will prevent your website from being penalized by Google. So what is White Hat SEO? White Hat SEO methods are the approved, natural ways of building traffic to your website which are well document in The Google Webmaster Guidelines. These techniques follow the rules and regulation of search engines. To learn more visit http://www.techjaws.com/how-to-avoid-being-penalized-by-google/
If you "really" want to stay on googles good side, read through the webmaster guidelines a few times - http://www.google.com/support/webmasters/?hl=en The only guidelines and suggestions that mean anything, are the ones directly from google.
It is easy to get penalized by google. Selling some links with dofollow, writing a paid post from payperpost or someone complaints you about selling link..
Don't do the things which visitors won't like to see. Don't show yourself as suspicious in front of Google, you will never get penalized. Avoid spamming and do natural things.
try reading and understanding google guidelines - this will help you know the no-nos if you dont want your site to be penalized by google..