If I'm playing a serious comp, or just a practice round by myself where I'm trying to figure out how I can realistically expect to play, I try to adhere to all the rules (at least, all the ones I know of.)

I don't have a practice facility (my town is only 5500 strong, and no driving range), so I'll often play a round and use it to practice (I tee off after 7pm when it's pretty dead). These are rounds I'll use to see what my 'perfect' score would be - sometimes taking two dozen shots on a hole, playing at least two balls (my original 'round' ball, and my 'boy, if I didn't flub that shot' ball).

Is it cheating? No. There's no scores submitted, nor do I brag about scores I could have had if I had shot perfectly.

As for people who cheat? If I was in a comp or playing for $, I'd be refereeing if necessary. But if I'm just out and get paired with a cheater, I laugh about his/her game, and just try to play mine.