Whether or not Google bans affiliates is (in my opinion) totally irrelavant. Instead, I HIGHLY recommend preselling your leads and funneling them to a blog entry (instead of going directly to the affiliated site). Sending traffic direct is sort of like walking into a bar, flirting with the first person you see, and asking for marriage. While I'm sure some have this talent, most have to "get to know" their friend over a longer period of time. I do recommend sending Adwords traffic to a Blogger.com account because Google owns that site (and my tests show you don't have Quality Score issues there). Do you like this strategy?
I do the blog and website presell already, I was just thinking of testing this method also. If it doesn't work out...well no one died.
Okay -- I'm cool with that... I'm a militant testing freak, too... ... Last time I checked, you don't need to say you're an affiliate in your ad because Google allows 2 links to the URL... one from the owner of the URL and just one affiliate.