Would notifying visitors that they can put text link ads on your site destroy you in terms of Google?
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I am debating buying this product for Joomla on that note: http://www.jv-extensions.com/content/_/joomla-extensions/jv-contentlinks-r52
Would you advise for or against this purchase?
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You'll be just fine with that until a competitor or disgruntled customer reports you to Google and they look into it. At which point you'll be hit hard for offering paid links, as will anyone who you link to as a result.
I'd want to be making a FAT wad of cash before I allowed the above to happen. Certainly not something I'd consider for a site that made any sort of income for me anyway...
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There are better ways to make money from your site. Worst case outcome? Manual action by Google. Best case scenario? Algorithmic PageRank reduction where your toolbar PageRank goes down by 1/3. e.g. PR6 -> PR4 making it less appealing for link buyers.
Indirectly by linking out to random sites can put you in a bad neighborhood and reduce your websites reputation and trust by search engines.