Matt Cutts states that purchased links or text links ads are detected and given no ranking value about 95% of the time. It could be that Google is closer to detecting 99% of paid links. In general, it is link sellers who will be penalized, and often suffer a pagerank drop.
There are 2 reasons to buy links: for direct clickthrough traffic and for a ranking boost.
I believe that links purchased for click traffic rather than for natural rank increase have the potential to also positively increase position if it is done on similar themed websites that are natural link partners.
An example of a link that probably would not coult is a link from the stanford daily online. Links from newspapers and content sites are generally not trusted as the link advertisers are completely unrelated and have no editorial value to the site.
A quality paid link on a local California site or directory for a business that provides a service directly to California residents would likely be high quality and extremely valuable to users. In this case the link would likely increase pagerank, or natural ranking.
When linking think of the signal of intent and contextual relevance. It is linker beware in this unsafe arena of paid links and link brokering.