WP-Classified has dramatically damaged my sites search engine ranking - within a few days my traffic had dropped to about a third of normal, now it's less than that. The cause after some investigation appears to be hidden text on every page of my site in a <div display:none> that linked to casino sites.
Upon a closer look, each and every .php file across my entire site had a new php command that was to eval based64decode (like encrypting the code). I decoded the text and it pointed to the wp-classified plugin.
The plugin was installed on my site but was not activated, use extreme caution if you have this plugin installed, even after removing the code from every .php file I could find the code seemed to continue to execute. Deleting the plugin corrected the problem. If you are running this plugin check your pages (view source). The hidden text was appearing immediately after the <body> tag.