While I agree with you that pay-per-post is a dirty business, in their defense I must argue the 'bloggers gotta eat too' angle. Listen to my reasoning; if blogs are ever going to become mainstream media conduits, and a better alternative to TV news, then they have to work out an acceptable revenue stream.

Now here's what I know on this subject, in which I consider myself an expert.

My company Smojoe tells stories about businesses online and we use photo contest media and articles, blogs and discussion forums to market websites, and most importantly win keywords for clients in search engines. In six campaigns last year (2009) I paid a dozen or more Canadian bloggers on average about $25 a post – that's a fact. BUT… I have rules. I insist that they write paid post disclaimers or publish a badge which I will provide if nec, and I urge them to write freely without any hesitations re: sponsorship and preferably NOT write a review blog. In a paid post the blogger should not state a personal opinion, but rather just give the facts. I like reading posts which link to client websites as information rich resources that further complete another story, or better yet, help compose an adventure that is only indirectly related to the sponsor.

And now I have three points to make on this subject,
1) The click-through-rate on a paid link in a blog is less than 2% so I only buy links from high PageRank blogs so I can get my clients the nec SEO link love rewards to help them rank higher in search engines.
2) The link text is the most important part of my paid post program and most bloggers are inept at placing perfect link text and its frustrating as they need 2 or 3 messages detailing EXACTLY how to link to clients ie usually under popular search terms and not the company name.
3) The sponsored content in Canadian TV news programs is sickening and its far worse than blogvertising because they NEVER mention the possibility that news content could be sponsored and yet we KNOW that so much of it is… So much crap we see on TV masquerading as news is bought and paid for by corps through PR agencies. That's got to stop.

This morning I saw Bev on CanadaAM interviewing a 'product expert' showing off the Top Ten Products of 2009 or something ridiculous like that, but there was no obvious criterion for their claims save that they were all sponsors of the show, and that was never mentioned.