"Softplaying", or folding a strong hand, can be a legitimate tactic when it is to your financial advantage. However, softplaying to show "respect" to another player is cheating and should be reported to the tournament director. That's usually enough to end it, since it's not financially good for the players doing it.
Really good cheaters, working as a team, are the most serious threat to either casino or online Poker. Given that cheaters don't usually make the best partners, it's rare in either type of game, online or offline, for a pair to make a good job of it.
Online games are harder to cheat effectively, simply because elaborate schemes are harder to execute and cardrooms have the actual hand histories available to them to analyze and detect patterns of cheating. So-called "self-collusion" can be detected, even if the double-identity player has two computers, two ISP's and two identities. Unless he plays his separate identities on separate tables most of the time, a pattern that the cardroom computers will detect will give him away.
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