My second question?
Mmm sorry for the confusion.
I mean, if I find a hot new product to promote but the merchant is in the top 10 natural listing and I'm an affiliate of the merchant. How can I get around the problem of not being able to display an adwords add because of the double url display policy?
Thanks
The second rule does not apply to the organic results, only to Adwords, so you don't have to worry about who is ranking where in the natural listings. You'd want to keep an eye on that because it might affect user response to your ad, but otherwise you don't have to worry about the organic results.
You could create a page on your own domain with some effective pre-sell content about the product, and promote that.