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I would be very suspicious of a paid review, to say the least. And, as Anke pointed out, it's even worse if this is not disclosed.
This does sound a lot more like advertising than a review. And while advertising can be useful, it's not useful in the same way a review is useful.
But, as WW and others pointed out, there are some conflicts of interest in most reviewing contexts: the reviewer may get free books, or the reviewer may be paid by a publication which derives some of its revenue from ads placed by publishers. These conflicts are more attenuated than with being directly paid by the author, however: for one thing, many professional reviewers receive far more books for review than they could ever possibly review, meaning that the donation of a particular book will likely have little bearing on the reviewer's judgment. And while working for a publication funded by book ads is a slightly more direct conflict, in practice I think this is ameliorated by only reviewing good books (i.e., if the reviewer doesn't like the book, he doesn't publish the review of that particular book).
Of course the NYRB approach is probably the best; its reviewers tend to be people known and knowledgeable in other fields who will occasionally write a longish essay on a few related books...since they are not dependent on the review for their livelihood (and they may be dependent on being viewed as having integrity), these are probably the best reviews going. But of course there aren't a lot of such reviews.
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