I spoke to the Pacific-10 office today regarding the jersey situation for the UCLA vs. USC football game, and was told the decision does not lie with Pac-10 commissioner Tom Hansen (as UCLA coach Rick Neuheisel suggested).
Instead, the decision to allow both teams to wear home jerseys for a game is an NCAA rule.
And a reader was kind enough to email this to me, so I shall share it with you:

http://www.ncaa.org/library/rules/2007/2007_football_rules.pdf

Rule 1-4 Article 3 on page FR-30 (or thereabouts) says the visiting team needs to wear white unless there is a prior agreement to do otherwise, in which case, the home team apparently wears white.