Lots of interesting responces so far, keep it going!
Here's my opinion - In game advertising is a great thing. As long as it doesn't interfere with gameplay or make absolutely no sense (apparently the intel core 2 duo is so powerful that they're still using it in the year 2142...).
In-game ads give more money to development and help the developers spend money researching ideas they wouldn't have before, as they didn't have the funds. Most people look at games like BF2 and Burnout and say, "well, they haven't really revolutionized gaming at all...". The truth is, the more complex games and models get, the more work it is to develop and create them. If you've seen Unreal Tournament 2007 screens, you can see the amount of detail they've put into it that just 3 years earlier would have been impossible (or at least implausible).
The other big problem is piracy. In this day and age, piracy has become a major problem for everyone, as nearly every program, song, or movie on the market is available through a free and illegal source. Usually people who pirate the programs don't end up buying them. This means lower sales figures and a lower profit.
None of these issues are particularly new. Some might even say things are better now than before (if any of you have had the unfortunate experience of trying to make good looking models for a low-poly game like quake II or half life, you'll know what I'm talking about). But as long as it's non-invasive, in game advertising can only help the community by making the process more profitable, thus increasing awareness and popularity of developing new games.
In closing, profit breeds ingenuity, and we could all use more of that.
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Mild to Moderately Evil
http://supergatorhator.deviantart.com/