I've heard this many times, but I've never found any truth in it. Products are made to improve the hair over time, so of course, if you're using a good product consistently, your hair should improve. It's usually not that the product is no longer working, it's that your hair has improved over time, and the texture is different (hopefully healthier). Now, everyone's hair is different, so that's not a rule set in stone. It's best to find what routine/products are best for your hair, and not try to follow what someone is doing.

The advice I would give is, if you do find products that you like, stick with that one product, and don't mix different products together (i.e. Pantene shampoo with Motions conditioner). Product lines are designed to work together, and sometimes, when you mix different products, it can actually cause damage to the hair. Once again, this is not always the case. Some people mix products and have no problems at all.