Google put out a new Webmaster Help video today about paid links. There's no new information, and most of our readers can probably skip this one, but essentially, Cutts is just explaining to the uninitiated the difference between a paid link that passes PageRank and an advertisement link, which does not.
Clearly, this is still something that comes up with people new to the game. This was, after all, a direct response to a user-submitted question.
This is still an important part of online marketing that any webmasmter needs to know, so it's probably a good thing to keep it in the conversation. If you fall into the camp that is still learning the basics, and you want to know more about Google's guidelines, and paid link policies specifically, start here.