Google has put out a series of videos discussing various forms of webspam. You can see others from the series here.
In this one, Google's Matt Cutts explains the "Pure Spam" manual action label.
This basically includes scraping, cloaking and automated black hat drivel. This kind of spam is the vast majority of the sites Google takes action on, Cutts says.
He does talk about the scenario of buying a domain that had earned this label and getting Google to trust it under your ownership, which some people may find helpful.
Google, in case you haven't heard yet, has just added a new feature to Webmaster Tools called Manual Action Viewer, which will let webmasters see if Google has taken a manual action against their site. According to Cutts, this only happens for less than 2% of domains.