I hadn't heard much about this, but this weekend I read a little more about it.
All in all, I don't think it's really that bad. I think that in any of the cases mentioned in the story above, the money didn't change the views and commentary that the bloggers would have produced. If there was some disclosure, all would be well.
The thing that I was interested in, and I hope to see more written on this later, was how successful was the Dean campaign with this ploy. Pretty smart idea if you ask me. Given the viral nature of the blogosphere, get two or three well known libs blogging about a candidate, and within a week or two, major buzz.