It's interesting to read the linked letter from FAA counsel. The interpretation is that if the pilot was going to fly from A to B anyway, they can take passengers from A to B because the passengers and the pilot have a common purpose of getting from A to B. But if the pilot is only flying from A to B because the passengers want to do it, then the pilot has a different purpose than the passengers, and it's illegal. The pilot should also in theory have "business to conduct" at point B, rather than just flying there for the fun of it.
Applying that distinction to real life would be pretty messy though.
Applying that distinction to real life would be pretty messy though.
Letter (PDF): http://www.faa.gov/about/office_org/headquarters_offices/agc...