The ACT-KM mailing list has all sorts of discussions and has recently taken on the topic of defining products vs. services. One of the participants dug up a definition of "services" from The Economist:
Products of economic activity that you can’t drop on your foot, ranging from hairdressing to websites. In most countries, the share of economic activity accounted for by services rose steadily during the 20th century at the expense of AGRICULTURE and MANUFACTURING. More than two-thirds of OUTPUT in OECD countries, and up to four-fifths of employment, is now in the services sector.
I'll leave you to figure out the circular definition of "products."