Planet13 - 3:32 pm on Jan 26, 2012 (gmt 0)
My personal opinion is that they will only take direct action if it is a really good link, meaning that it is a link that is very hard to detect. (Or, if it is brought up in a highly influential publication, like the New York Times).
Most of the spammy links seem to NOT get penalized. MOST of the spammy links seem to just get ignored (hopefully) by google.
The sites that I have seen that have been penalized had a few links that were on sites designed specifically for placing paid links. They had articles that more or less made sense, and then an in-content link that seemed out of place (and also had exact keywords anchor text).
Note: This is only my opinion and it is based at looking a only 5 sites that have been penalized. Those who have looked at numerous sites might have a different opinion.
Ideally, you want to get a better link than the three web sites that rank above you. And yes, go ahead and report them to google, but their is no guarantee they will do anything.