koncept - 5:15 pm on Apr 6, 2011 (gmt 0)
It's not against the rules to bid on domain names as search terms, however they often get a low Quality Score, but not always.
It is putting the domain into the ad text that is the problem - but only if the domain has been reported to goog by a trademark owner.
I bid on a particular domain in google and the owner contacted me asking me to cease. I asked them to take it up with google as they were the ones allowing the practice. So if you want the ads with your domain to stop you need to contact google but be prepared to prove that you have the business name /domain name trademarked.