Where do you draw the line?

I came across an article in USA Today that talked about product placement in last Friday's episode of What I like about you. The episode revolved around two character's competing for acting work in the new Herbal Esssence ad. The commerical then airs for the first time during a commercial break following the scene.

This is a huge placement for Herbal Essence. Not only was their product featured in the program, the plot was based around their product. And then to top it off, they were able to introduce their new commerical to consumers in a new and interesting way.

The only problem here is the line between television programs and commericals is becoming more and more gray. Was this a half an hour program or was it really more like a half an hour commerical for Herbal Essence with familiar characters thrown in?