The idea here is that you can link to products/services that you're talking about via an affiliate text-link within your content. These links are usually contextual and relevant to the topic being discussed. For example, my review of iWriter has an affiliate text-link within the tutorial.

Advantages: These types of affiliate links can bring in some really good returns, especially if you accompany them with a review or tutorial on how to use the product/service or a specific feature of them. Matthew Woodward's SEO blog is a prime example of effective in-content affiliate links.

Just looking at his August 2013 income report shows that he banked a modest $6,774.57 from only ~23,000 unique visitors - not bad at all!

Disadvantages: One disadvantage to using in-content affiliate links is that it can sometimes cheapen your content. This is particularly relevant within niches like travel, where readers can be really put off by articles that are too sales-orientated.

This is where you have to make a call on monetization vs user experience. In situations like this, the best policy is often to be as transparent as possible and make sure that your readers clearly understand that there are affiliate links in the post, and that they also understand why they are there (within a disclaimer, maybe).