Ugh, they're definitely showing SEARCH ads based on something other than keyword searches. I was just reading a content site that had those awful Intellitext ads on it. I hovered over one and saw it was for Live Search (aka MSN). When I clicked on it, I was taken to a Live Search page for one of our PPC keywords, with our ad on it. BLECH.
I wondered why we had a pocket of keywords with huge leaps in clicks and no resultant increases in conversions. This sucks. Is MSN really so desperate for traffic that they've resorted to running crappy ads for their own search results???
What this amounts to in my book is MSN running their own garbitrage ads. You click on an ad and get a page with more ads on it. This is bad, bad, bad, folks.