Do You Refer People for Jobs? In Person, On Sites like Blue Chip Expert?

Referring people for a job opening is easy if you are confident that they will deliver.
More often than not things will not be so clear cut.
It might be that you are not sure how strong the hiring company is.
The person and the business might not be the best match or you are not 100% sure of their reliability.
How do you decide when you find yourself in this gray area?

An invitation from a contact to join Blue Chip Expert which Paul Kaihla of the now defunct Business 2.0 called A MySpace for job seekers. 
Is social networking the future of hiring?
The service describes 3 roles for members:

• Professional seeking work
• hiring manager (In–house recruiter)
• Networker - not going to hire or work but knows both professionals and hiring managers

You can join Blue Chip Expert only by invitation if I got it right.
To sweeten the pot, you get a cut of the referral fee that they charge to hiring companies, details on their frequently asked questions.

The same questions that come up when referring a person for a job arise when co-signing a loan or  suggesting someone as a tenant.

How do you approach these questions?

Have you been burned and decided not to advocate for anyone?

Thinking about referrals on Monday  Work Etiquette # 26

Previously: Falling Asleep on the Job? Ways to Fight Boredom

Related: Go to a Job interview, Get paid, a Notch Up idea