It must be hard to be Google, what with everyone trying to game your search results pages all the time. Despite its technical sophistication and total domination of search, however, it seems Google still can't control incentivized/paid links.
Google published a notice on the Webmaster blog stating that bloggers who receive free or gifted products from brands or manufacturers should follow some "best practices" so they don't get penalized. Of course, that might just be an empty threat (digital posturing if you will) as they don't necessarily have any method to differentiate sponsored content from organic content.
Regardless, Google is advising that bloggers who write about products and link to the provider of the product in exchange for the free product, should "no-follow" links, disclose that the writing is a result of the free product, and create compelling, unique content so that it adds value beyond what's available on the Web.