Traditionally sites that sold links sold them as sitewides, as links in the sidebar (like blog rolls) or in the footer.

When Google introduced nofollow advertisers understandably now all wanted dofollow links (as a large part of their ad buying is for SEO purposes). And that's fine. It's entirely between the site owner and the SEs. If the owner wants to sell ads but not disclose to Google that he's selling ads, that's entirely legal. Google's stated "preferences" on disclosing paid links are just that - their preferences. It's not law.

Now many advertisers are insisting on not having links in sidebars. They want a term in the main article/content converted into a link, or they want a sentence added to the article (or post) with a link within it.

I'm not comfortable with that. It seems to me that those are adverts disguised as editorial endorsement. It's one thing to fool search engines - I'm happy to do that - but it's another thing to fool visitors.

Also, isn't this now illegal?