Here is a great blog post about this topic by John Carlton.
A Big Steaming Cup of Hysteria
I especially like this post because he is calm and practical about the whole thing. It seemed to make a lot more sense after I read it.
I think this law - as it applies to us - is very straightforward. Tell people that you earn money if they click on links on your website in a simple blog post. Just like John did in his "PS" at the end of this post.
**This is not legal advice. Only my opinion.
**