I think we're confusing the issue here. The original poster asked if you borrow someone's aircraft and pay for the fuel, is the aircraft considered to be "for hire". The conversation has mutated to a discussion of whether the operation is Part 135 or not. Clearly just renting aircraft and flying them for your own personal and business use is not 135. I think the question revolves more around, does it need a 100 hour, landing light (for night VFR) and will the insurance cover it?
As far as the 100 hour inspection and night flight landing light, the FARs refer only to hire, not "compensation or hire" In interpretations where the FARs have used the word compensation as well as hire, the FAA interprets the word compensation VERY broadly. The use of only the word "hire" probably indicates that at least an attempt to be operating for profit or using the aircraft to make money would have to be made. One guy borrowing an aircraft and paying for the fuel would most likely not be considered "for hire"
Having said that, you can never be too sure. I do not have any FAA interpretations on this issue, so I cannot say what they have done in the past, but since the phrase "for hire" is vague, it is open to a wide variety of interpretation.
As for the insurance company, you would have to read the policy very carefully. At the very least you would either have to meet the policy's Open Pilot Warranty minimums, or be listed on the policy as an approved pilot. Again, what an insurance company thinks is "for hire" is very much open to interpretation as well. Bear in mind that insurance companies will do whatever they can to get out of paying a claim, so they would (in the event of a claim being made) probably try to deny a claim on the basis that it was for hire....at least initially.
Just my $0.02
Ray