Fascinating video. Certainly, villifying of PR in some ways, but for the most part it's very accurate.
I am not sure if I agree that consumers believe they are free from propoganda, though. If people trusted the media so much, why is the blog revolution occuring? The truth of the matter is that people are savvy to news reporting and its strengths and weaknesses. That's why independent verification of product usage through third party users is an increasing must. Consumers no longer trust the newspaper/magazines/media in full.
It's also difficult for PR firms to pull a fast one on bloggers. Blogosphere PR requires a much higher degree of honest marketing. Otherwise negative posting begins...
A very thought provoking video from PR Watch.