With the cross-border attack by US forces against the Taliban inside Pakistan and a step-up of attacks on Taliban camps in Pakistan, ties between the two countries have deteoriated quickly.
First is a New York Times story that claims President Bush has allows US Special Forces to enter Pakistan for ground attacks against the Taliban without prior approval to Islamabad. If true would be a significant policy change after years of fighting, previously only allowed unmanned vehicles and limited.
Despite it being denied officially, it's been known for some time that there is an agreement in place between Pakistan and the US that allows US unmanned planes such as the Predator to enter Pakistani airspace. However they have refused to allow any US forces enter Pakistan, despite it happening 2 years ago and apparently with or without permission, may of happened just yesterday.
UPDATE: US confirms raid inside Pakistan