From TFA, they send themselves MD5 hash of the websites people have visited. Knowing that, I believe that they are using your DNS history signature to compare between players that are cheating. I don't see why they would ban people they aren't sure are cheating, as they certainly don't want to be hit by PR nightmare when people would get banned for no reason. The rare false positive they get at this time is already hard on them, and they go great way (well, large amount of steam credits happen) to make those people happy when errors really do happen.
I have looked at websites offering hacks myself, and that was mostly to know what I was against; I don't want to ragequit out of a game when the players are really good, but I certainly don't want to provide free kills to cheaters. Being able to recognize the difference is important, and knowing their arsenal helps a lot in that department.
Oh well, I've not been playing competitive steam games in a while anyway.