I’m guessing that most merchants who go with LinkShare or CJ to: 1) Avoid recreating the wheel, and use a trusted, pre-built system for tracking and reporting the activity.
2) let someone else deal with sending several thousand people a small monthly payment.

I have advised a few major brands ‘not’ to use affiliate program management systems that give affiliates ‘normal’ or ‘naked’ links, although for smaller brands I think this is a great way to go.

The reason I don’t advise it sometimes is because most of the “super affiliates” – that is, those affiliates who have the ability to drive massive amounts of sales – don’t want to help you compete with them. If they link to your site from their, it has the potential to help push your site above theirs, thus making it more difficult for them to make money on the keywords associated with that product.

Search for this concept or ask the affiliates on any major forum, like Abest Web and you’ll see what I mean. There is some serious hostility from big affiliates toward naked links.

But again, with smaller brands and those who are more interested in building links than actually having a high-revenue-generating affiliate program the possibility of getting a huge boost in link popularity might be worth while.

As you mentioned above, if the URL you end up on has any parameters in it (i.e. &affiliateID=1234) you are creating some duplicate content problems and competing against your own pages that do not have that parameter.