@annfurnivall Yes, we run sponsored stories for clients.  
Just to explain the whole shebang: Facebook offers two types of ads, Sponsored Stories and Facebook Ads. Within each there are two types, so really you have four options. To give examples:
Assume we are friends on Facebook and O3M is running a paid campaign. You would see: 

• Sponsored Story, Page Like Story: “Rob likes O3M” 
• Sponsored Story, Page Post Story:  ”Rob commented on O3M’s post”
• Facebook Ad, Page Post Ad: “O3M: Internet trivia time. Winner get’s a $105 AdWords coupon” (i.e. showing you a post of a page which is targeting you with a paid campaign.) 
• Facebook Ad, Facebook Ad for Pages: Like O3M For PPC Secrets. [picture of a puppy] (i.e. a traditional ad.) 

@we are  running a  100$ ad  campaigne  right now for our   weekend  event….not  free tho…i think  thats a one time  deal….

but we havent  ever  run  sponsered  stories…. 

guess i better  try   reading the   facebook  descriptions  again, ive  tried  already…. …..  they  just  dont   explain  down to my level…. 

@scottmadden

@robpeck  thanks  rob….  does  ROB  KNoW  HES IN A SPONSERED  STORY? ~ page like story~ doesn not   make  sense to me…what  did  you mean?

we are  running   pay per  click  ads  right now for an event, …we have  2300  fb  fans….do you  think   sponsered  stories would  be  good  for us?   we are  well  connected  with our  fans, most have actually  been to the  store …my  guess ….  i dont  mind  spending  if  it  would  be  a  good idea…. http://www.facebook.com/greenoakantiques

ive  been  reading up on sponsored this morning and have    see some  negatives …  ….partly   that  my  customers  might  feel used by  being  put in  an ad    without their   permission…i think i might personallly   object  to that  in  some  cases…..im  all for  organic  growth and  this  might  be a little over the line  for me….maybe there  could  be one  without   the  customers name  being  used…..

????    

@annfurnivall No prob, happy to help.

Rob’s friends will not know he is appearing in the ad being sent to Ann. Remember Rob is already Ann’s friend, so whatever privacy settings are in place would determine whether Ann can see Rob’s friend or not.
What are you referring to is indeed the sponsored stories. Basically, Facebook is trying to incude the viral part of things into their paid offering. You would be getting to Rob’s friends through the ad, but only through the ad (i.e. you couldn’t directly message them from your page or anything like that.) 
The evil empire turned underdog  Microsoft is doing some pretty cool stuff along the lines of this as well right now. See http://community.microsoftadvertising.com/blogs/advertising/archive/2012/02/14/people-powered-stories-social-advertising.aspx 

Best,  

@annfurnivallMildly NSFW, but your questions about appearing in sponsored stories are laughingly addressed in http://gawker.com/5888718/how-i-became-amazons-pitchman-for-a-55+gallon-drum-of-personal-lubricant-on-facebook