Whenever I see a page that clearly violates Google AdSense TOS I tend to ignore it. To me, I’m better of working on my own websites rather than going around grassing people up. A friend of mine on the other hand is a big AdWords advertiser and he can’t stand people getting away with click fraud, which is more than understandable.
One day he ended up on some website that asked people to click on their AdSense ads. Outraged, he contacted the AdSense advertisers who appeared on these ads by entering the url in his browser and informed them about the click fraud. Advertisers in their turn thanked him for the warning and went ahead to complain to Google and ask for a refund. Turns out one of the guys has actually lost thousands of dollars with that particular campaign. Soon they have received a full refund from Google. A friend of mine was then contacted by one of these guys and was offered $1000 as a thank you for saving the company a lot of money.
Apparently a few guys go around doing this full time and earn good money. I assume they are a bit more shameless and actually ask for that “thank you”.