Business Week published an article about click fraud -- bogus clicks that cost advertisers millions of dollars each year. It's almost impossible to keep some fraudulent clicks from slipping under the radar -- but if you want to reduce the risk of being a victim, you can.
As an advertiser, it makes sense to only put ads on websites you trust. For example, if I was advertising for a store that sold blood pressure monitors, the first thing I would do is turn the "content network" option off. By doing this, my ads only appear on the Google search engine for queries (that I define) like "blood pressure monitors" -- fraudsters do not make money by clicking these types of ads.
Instead of using the "content network" option, site targeted advertisements will help you find other websites for your ads. For my "blood pressure monitor" example, the tool recommends sites like about.com, answers.com, healthline.com and many more -- great candidates for my ads.
By taking these two simple steps, I have replaced websites potentially taking advantage of the system with ones I can trust. Using this technique I might receive less impressions and click-throughs, but the ones I do get will be much higher quality.