PPC isn't a bad thing. I use ads on domains that are clear products/services and are not really trademarkable, such as paydayloans.ca, autoinsurance.ca, ink.ca, etc...
And no, I don't generally try to filter out specific words from ads, it would be too difficult to predict every potential infringing word. If anything, I will specify the keywords for ads, but that is for optimizing the ads to ensure they are relevant rather than having random ads.
The majority of my domains do not have ads due to concerns of potential infringement.
I generally don't use ads on domains that are brandable and trademarkable such as acronyms, names, words that are non-product or non-service related, etc... These types of domains simply don't have any relevant product or service ads anyways.
The big risk that PPC users might encounter is the fact that when these companies optimize ads, you might see one ad, and a visitor from a different region or country will see something completely different. So you'll never know what ads are being shown where, and you also won't know what trademarks exist in random countries. Many good domains have been lost in UDRPs from a complainant in another country for this reason.
And yes, you can be sure that infringing PPC ads are going to invite disputes and many of them are going to be successful.