When I covered the You&A With Matt Cutts at SMX Seattle, I was only liveblogging - there was no video. But now, here's a video that confirms that Matt Cutts has said about link buying:
As you can tell, Matt confirms that link buying is not in the best interest of the user, and DigitalPoint Forums members have taken note. Interestingly, Google made a clarification yesterday that Google frowns upon excessive link exchanges because they want high quality results and not any that seem to be manipulated.
Still, forum members doubt that Google can determine if links are bought, but some people won't take the risk. They know what's at stake:
It is your site and you are free to do what you want with it. It is their search engine and they are free to include whatever sites they wish.
Forum discussion at DigitalPoint Forums.