I think Pepsi f'd up. But like most things it's not as simple as it's being made out to be. Would Russell really care this much if Ludracris wasn't on his label? Pepsi did try to "lighten" the ad by adding Marie and Donnie Osmond and Florence Hendersen. They must have gambled that these clean cut figures and the fact that the Osbournes are on every channel lately would be enough to avoid further criticism. At the end of the day they just want to sell more soda, and I doubt they care who helps them do it or what they stand for. The battle over what's acceptable is really between Russell Simmons and Bill Oreilly, not Pepsi.
I never saw the Ludacris ad, but I did see the Ozzy ad and thought it was funny. I think that short cameos are Ozzy's speciality. Watching him and his family for 30 minutes is hopelessly boring.