Since Google's inception, links have been at the core of the search giant's algorithm, as such for any SEO company, webmaster and site owner the pursuance of links is a significant issue. Whilst the text of a website will inform the search spiders of its theme and content, where it ranks in Google's natural search rankings is dictated by how important Google considers the site, and this is governed by links.
How it works is, if a site that is highly regarded in Google (indicated by having a good pagerank PR4+), links to another website it conveys some of its authority or "link juice". The more authoritative or influential the donating site is the more juice it passes. Therefore the flow of link juice between websites is a fundamental requirement and as such has become a much prized and sought after commodity.
Like any commodity, market forces and the principal of supply and demand then come into the equation. It is recognised that the practice of selling links makes a mockery of Google's algorithm; instead of the link juice flowing between sites because the donating site considers the recipient worthy, now it's about cold hard cash.
Not surprisingly Google has sabre rattled on numerous occasions about the practice, culminating recently with a statement at the San Jose Search Engine Conference that they want webmasters to start policing their linking or Google will implement a filter process.
Webmasters are unlikely to police their links, certainly not en masse; after all they would effectively be damaging the value they can earn from their sites, so Google will most likely have to take the lead. Just how likely or successful they would be to identify paid links on a site is anyone's guess; they have stated they can identify 9 out of 10 paid links. It was interesting earlier this year when Google asked webmasters to report sites that sold links (it wasn't well received by webmasters).
Certainly some text link programmes would be easily spotted, but others less so. In fairness it would not be difficult for the link traders to evolve their products still further to overcome any automated filtration system. So the game will go on, my biggest fear is that whilst the original concept of the internet was to be a great leveller, the micro company sitting next to the big corporate in the rankings. As the search optimisation process becomes more difficult larger companies will be the winners because they'll have the budgets and the profile to do so, the rest will just have to pay for sponsored advertising - like Google's Adwords...!