If anyone has any doubt about Google taking paid links into consideration, just login to your webmaster tools. There is now a "Report Paid Links" link. This can only be bad as you know several black hat webmasters are going to be reporting bad links in trying to damage the PR of those above them. I just don't know how I feel about this, but it will add to the controversy that is for sure.
you're right, but Google won't penalize those reported sites instantly, I'm quite sure they ll workout before penalizing the reported site.
I agree Google does not give too much concern on reports made by this tool. It is just there to make you feel comfortable. I and many people tried many times but they didn't get any response and any positive step from them. So they are just dummies don't rely on them..................................