Carbon offset schemes: a quick and dirty overview

Carbon offset schemes have some problems that make them ineffective at best, and potentially dangerous:

Carbon offset companies are unregulated at present. There is no authorised body to check how they spend your money, and there are many, many examples of unethical operators and scams, especially when profit ( for them) is involved.
Offset programs create the illusion that you can neutralise your carbon emissions so that they don't matter — even though your emissions contribute to making the planet warmer right now!
By using inaccurate ways of calculating emissions and low per-ton valuations of carbon, offset programs foster a belief that the cost of our high-consuming lifestyles is really very low.
Offset programs rarely make any serious attempt to encourage us to change our behaviour — for example, to not fly, to not purchase unnecessary stuff — and thereby reduce our carbon emissions.
Tree planting projects are fundamentally flawed on many different levels and cannot be relied upon to take up meaningful amounts of carbon, especially not in the short term — which is when we need it most.
Some carbon offset schemes use tree plantations and renewable energy projects in impoverished nations to offset emissions. There are many examples of these having very negative effects on local people and their environments (e.g. through planting non-indigenous trees).
Dowload an excellent article on Carboin Offset schemes here.