Advertising is getting a link for traffic/branding or whatever from the site you buy the link from and a paid link is selling pr, I think. Problem is you can't usually tell intent so google wants us to tell them by adding a rel no follow to all paid links.
I know, I was wondering that too, I link out to sites that I like everyday because my site is a directory and people who I link to freely sometimes come back and buy an additional links in my directory.
So how will google view that? Having several links to the same site, some with the no follow and some without.?