Kanal 5 will be the first publisher to use VideoPlaza's ad platform to provide overlay video advertising. Ad sales will be done by Kanal 5's current ad sales operation, which apparently has sold out its video inventory the last couple of months. Adding in-video advertising, in addition to pre- and post-rolls, is a way to increase inventory. Hopefully the overlays won't come too often and be reasonably relevant (even though I don't think that the in-video ads are generally going to be more relevant than general ads).
The ad format is similar to some of the tests YouTube have done and to the format Videoegg offers internationally.
What's good about the format is that it is a part of the video, which makes it easier to realize a business model where the video is embedded on other sites than Kanal 5's.
Sorosh writes about the deal on VideoPlaza's blog (in Swedish).