Yeah, I'd probably just cut off the links, but I think it does serve a useful purpose...a couple sites that I get a lot of refers from are helpful to my PageRank (my iPod car install article in particular). Me linking back to them is helping too.
I sent him an e-mail saying, "look, I caught you red-handed and banned you from my referer log, and I've posted an article on my site which mentions you in not the best of light. Do it again, and I'll have your ISP yank your website". Haven't gotten any hits from him since then. It'd be poetic justice if my article ends up showing in a search for CPC-Consulting, and especially if it shows before his own site. :)
*insert evil laugh here*