“In order to stay within Google’s quality guidelines, paid links should be disclosed through a “rel=nofollow” or other techniques such as doing a redirect through a page which is robots.txt’ed out. ”

http://googlewebmastercentral.blogspot.com/2007/12/information-about-buying-and-selling.html

Bottom line, buying or selling links passing PageRank can get you banned from Google. It’s a good rule of thumb to only buy or sell links using “nofollows”.

Great post, I am wondering, can you elaborate on this rule. I have a few links I paid for in directories, including some deep links, how does the Google rule apply to me?