Adidas uses the product-placement route with frequent branding in NBA Live 07. Burger King takes the obvious, if comical approch in Fight Night Round 3, with an unlockable King mascot character who joins your ringside entourage.
Acclaim plans a different approach with free, ad-supported MMO games; pop-up ads from corporate sponsors would let you know which real-world company just paid for your in-game sword. We're interested in seeing how gamers view that tradeoff, but clearly there's a line where too many ads will scare players away.
See also: Grand Theft Auto: Coca-Cola City
See also: The King is in your Xbox 360