It's true (unlike what Google tell you) adword fraud is a major issue. Basically Google may indeed have a pretense of concern, but don't forget they are making money off this 'service'. Although it is possible to set a budget it is distinctly possible for a competitor to click you into bankruptcy (depending on the budgets set). Using a browser instance such as Torpark, it is possible to rapidly shift IP addressed without the use of compromised or open proxy servers. To put it another way, someone can use an anonymous browser set to hop IP addresses (and with a little code manipulation force this hop after every click) and thus click all day with impunity as their IP will always be unique, and you end up paying the bill. Don't bank on Google to pick up on adword fraud either. Just check the web for a multitude of horror stories. In the states the probem has become so pronounced there are now a number of legal actions against the 'do no evil' merchants e.g.
http://www.theregister.co.uk/2005/06...fraud_lawsuit/
The only way to ensure that you will not be defrauded, or as the execllent Wargames would have it - the only winning move is not to play. Hope that helps, and should you want any additional info please feel free to give me a shout.
Cheers,
Mike
mike'at'amisecure.co.uk