Google has officialy opened AdWords product ads to all U.S. advertisers. According to SeroundTable, Google is running 2 types of product ads. One is commission based product AdWords ads and the other is normal PPC based product ads.
Here is some history: Back in January 2008, Google began testing product results in ads. They continued the test in October 2008 with expandable links to these ads. Then in February 2009, the ads became very well seen by many searchers. In May they tested one line product links and in August they tested open product ads. Forum discussion at Google Merchant Help. [via SeroundTable]