Well, what's new? Google did cut the
PR of quite a few major link selling sites this year - and those sites can no longer pass it ... because they don't have it.
The question,
does it apply to the whole site? can be answered by looking at whether any of the pages of a given site have
PR. If they do they can pass it ...
Limits? I think if Google saw one link sold it would remove the
PR of the page where it's sold ... if the link selling is site wide ... then bye bye
PR period ...
They *can* if they are *caught* ... or if they fit the pattern that has been worked into the algorithm to address the issue.