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I am starting to read more and more articles on the concept of Blogvertising. I like this one from Gappingvoid.
There are probably a few kinds of blogvertising.

1. Google or Overture Ads.
Many blogs have a revenue stream by placing Google ads relevant to the topic they are passionate about.
2. PR / Endorsements
Some bloggers are in the business of doing reviews of new products, and therefore become a PR source for independant reviews.
3. Consumer Blogging Media
Most bloggers are writing about things that they are passionate about. Things that inspire them, or a deep cause they relate to. In such articles, recommendations of products or services are sometimes made. But these discussions are the same discussions that you hear when consumers talk to each other about something they are passionate about.