Advertiser123, I sincerely hope that you are quoting me out of context. :) Haven't re-read the report in awhile.
There is of course a history of sleaze in PPC here and there, but overall, is it sleazy today? I would say quite the opposite given the tighter relationship PPC advertisers have with ROI data - and the insistence by the major clickthrough providers (Google & Overture & FindWhat) that advertisers should expect a strong, measurable ROI and should track their results.
I would say that advertising in general in the past 50 years or so should bear most of the "sleaze" tag for its willingness to oversell something so nebulous. Here in Canada a government-linked ad agency (typical stuff in politics where friendly ad firms get juicy contracts to promote government services etc.) has just been involved in a scandal involving billing for promotion that never happened - "creative" exposure at sporting events and a bunch of other stuff they figured would be difficult to verify. But that seems to point to a larger problem: the benefit (or lack of same) of advertising is often difficult to verify - and big ad agencies have the big-time profits to prove it!
So in that context, search-based PPC advertising is pretty accountable by comparison.
I am trying to learn a little bit more about reporting disparities myself. It's clear that a click is not an indisputable, measurable "event." The interpretation of what "counts" as a click can vary depending on who is measuring. Many of the metrics services will give you a list of possible reasons for disparities, as will Google if asked. I suppose my rule of thumb is that disparities of 5%-10% are normal enough given the steady volume of lukewarm, uncommitted clickers who may click away very soon after clicking (without waiting for a page to load, etc.). But when you get big disparities clearly it represents a problem or anomaly of some sort. I don't think those problems are necessarily attributable to bad reporting or to click fraud in all cases, though. It's difficult to generalize. Sometimes an investigation is needed, but on the whole, I believe we're going to have to allow for considerable slippage for the time being.
Given the increased scrutiny the major and 2nd-tier PPC's face now, "sleaze" is virtually impossible to get away with, although there is still certainly a willingness to divert attention from uncomfortable issues such as click spam, impression spam, and unevenness in quality of partner traffic, etc.
Some companies (correct me if I'm wrong) make it more difficult to see what's going on than others. I find it difficult to get meaningful reporting from LookSmart, for example. I can track ROI of course using a tracking URL, but certainly they don't provide the kind of reporting detail offered by "true" PPC providers. Anytime there is a chance you're being sent clicks you don't understand, there is a problem IMHO.