Putting the ads on load screens, game menus, etc etc -- as long as they don't get in the way of anything on screen and ain't within the actual game itself, if you ain't paying a penny for the game, it's probably not too big of a deal, really.
But once ads appear in the actual gameworld itself AND it isn't very well-placed, this is where the line is crossed. For example, if I see a MickeyD's ads on a billboard in a game taking place in 1000 AD, I think that's a definite line-crosser; way out of place.
My big complaint about the ads is the dynamic ad-generators, like say BF 2142 has. If you're going to give me ads in-game and a piece of Spyware to come w/ it to generate it all based on what sites my web browser hit, forget it. I don't want anything that can hinder my game's performance framerate-wise, either. Static ads like Quake Wars will have might not be so bad actually when thrown into the gameworld, as long as they ain't placed poorly and whatnot -- we'll just have to wait and see how well (or not so well) the ad-placement turns up there. I still am not too certain how well that'll turn out, myself...
I'm afraid that many of these ads placed in-game will be very poorly placed -- and could often ruin the atmosphere and experience itself of the game, when in fact the ad-placement should strive to make especially a realistic type of game setting look more realistic, since the real-world's littered w/ ads everywhere. Especially if you put this in the hands of EA and Ubisoft, then we can really start to worry about how poorly these ads will be placed...
EDIT:
I'm playing R6: Vegas, and I just noticed in the level when you're exiting the casino and you're out on the streets, looking for the van and its transmitter to actually hack, there is a movie poster for the new movie "Shoot 'Em Up."
Also, I noticed every time I boot R6: Vegas, it always seems to quickly look for updates online.
