How to tell if you’ve been penalized. Can banner advertising cause pen

Have you been penalized because of banner ads?

[Talar]

Maybe this is common knowledge but I think I found out one way to see if you are penalized. My website’s homepage suddenly disappeared from the results of my important keywords and only shows for some very specific full sentences from my homepage. I searched for the cache (cache:URL) and found that it doesn’t exist. However when I find it using the very specific sentences there is a cache and it is recent. It seems as if the spider found it and then a penalty was applied and it was removed from the index.

I wrote to Google and received a standard response which included: “Certain actions such as buying or selling links to increase a site's PageRank value or cloaking…can result in penalization”.

I suspect that this could be the problem: I own another site (different domain) and I've posted a banner ad advertising my problem website on every page of that site. In order to save bandwidth and also because it was faster to post (and I don't have to hire a graphic designer) I made the banner out of a table and text with colored background. To a visitor it looks like a banner but to a search engine it may appear as a text link. When I search for links to my website I can see that lots of these links show up. Could this be the problem?

If this is the problem, does it mean that I should change the ad to a graphic one? I guess that would make no difference or would it? What if I buy banner ads on other sites? I am not trying to increase PR or do anything against the guidelines however I am now afraid of buying ads anywhere but AdWords. Can somebody clarify how Google considers one an “illegitimate link” and another a “legitimate ad”?