I have a couple rules for myself (though they aren't for everyone...)
Each sponsored opportunity goes through these filters:
1. Do I like the product?
2. Do I need the product?
3. Do I need the money right now?
4. Do I have the time right now?
5. Do I have a good catch for the ad?
6. Does it fit well within my blog theme/categories?
You'll notice that considering my blog readers is 6th on the list. Many bloggers would take issue with that, but for me it is on the list, but it is at the bottom. Why? Any free media has ads. As a blogger, I am providing quality content free of charge and readers should be willing to deal with a sponsored post now and then. Of course, I certainly don't want them to be the bulk of what I publish, so I try to stay about 10-1 regular content vs. sponsored.
I also need to have a creative idea for the post. I cannot just publish a sales pitch, so for me, the product has to spark an idea for me.
...and yes...if I need the money, I will do a sponsored post for just about anything that isn't morally objectionable.