There has been some great discussion recently about the "degrees" of cheating in online poker these days. Everyone should be aware of the scandals at UB and Absolute, but that is really only the tip of the iceberg when it comes to players "gaining an edge" inappropriately.
Here are some of the links that I think you should check out to gain a better understanding:
Nat Arem write's about the Hierarchy of Cheating in Poker on his blog. This is a very interesting summary of the various degrees of cheating in online poker.
Bill Rini, a poker pro and poker blogger, has some interesting comments regarding Nat's Hierarchy piece. Check it out at Bill's blog.
Do-or-Die-Poker writes an interesting piece on Phil Hellmuth's latest scandal at UB.