Cybersquatting is in fact illegal, at least in the U.S.
You can look it up; see the Anticybersquatting Consumer Protection Act. Cybersquatting can result in transfer of the domain name and damages.
Furthermore, the ICANN Uniform Dispute Policy applies to most domain names, no matter where you are. It definitly applies to .com's, .org.'s, .net's. The ICANN UDRP will forcibly transfer a domain name after an online arbitration if the domain name is held to be a cybersquat.
NEVERTHELESS, "cybersquatting" is a very limited concept. It is perfectly ok to register any domain name, provided you did not do it "in bad faith" and with "no legitimate interest", e.g. to sell it to a preexisting trademark owner, or to capitalize off their traffic, etc., or to infringe someone's trademark.
So, using a generic term for PPC can be fine in many circumstances. Likewise, even a typo of a descripitive or generic term can be ok. Similarly, buying domain names and merely stoockpiling them to sell at a later date or develop, is also OK, provided that these domain names were not registered to take advantage of a trademark owner.
Also, trademark law does not give a trademark owner exclusive rights in most cases. Its ok to have a trademark for BLUE BRAND perfume, and for someone else to have a tradmeark or business for BLUE BRAND for soft drinks. The exception of course is when it comes to "famous" marks, e.g. COCAL COLA is so famous, no one can use it for perfume, or anything else, because the public will always be confused since its SUCH a famous trademark.