I'm a moderator on many different websites and each site has its own rules of conduct not just for users, but for moderators as well.
On WinCustomize.com, moderators are encouraged to moderate politely but publicly. If a user is acting out, a moderator is supposed to make his presence felt so that observers can see that "the cops are on the beat".
On other sites, moderation is done discretely. If someone is misbehaving, a private message is sent to them letting them know they must stop or they face punishment. To users on the forums, the moderator's presence is almost invisible. This way, so goes the theory, the forum participants don't feel like big brother is watching.
Which begs the question, which way do you think is more effective?
No Need to Click Here - I'm just claiming my feed at Feedster feedster:99fa96d97dd67dbadc2839937ce79167