No he wasn't; yes it is true. It is my understanding that the only head of state who has been invited who isn't a member of royalty is the UK Prime Minister, David Cameron.
By the way, if there was a breach of protocol between Mrs. Obama and Queen Elizabeth, it was mutual. The London Daily Mail gave the incident thorough coverage, including photos:
"She is not renowned for public displays of affection. Which made the Queen's decision to put a friendly arm around Michelle Obama's waist at a Buckingham Palace G20 reception - prompting the U.S. President's wife to return the gesture - so utterly astonishing.
Finding herself next to Mrs Obama, the Queen remarked on their height difference. As she did so, her hand edged towards the small of Mrs Obama's back. Mrs Obama responded - and even rubbed the Queen's shoulder - before both women moved gently apart after about ten seconds.
The sight of the Queen publicly hugging another woman astonished other guests. An onlooker said: 'It was a pretty simultaneous gesture. We couldn't believe what we were seeing.'
It was an electrifying moment of palpable majesté: A breach of centuries-long protocol when the friendly and outgoing Michelle Obama put her arm round the Queen.
It now appears, however, that it may have been the Queen who made the initial move. In any case, it was the first time that anyone can remember in her long public life that she has put her arm around another woman.
'A mutual and spontaneous display of affection and appreciation,' was how a Buckingham Palace spokesman hastened to describe it."
Read more:
http://www.dailymail.co.uk/femail/article-1166490/Ones-new-best-friend-The-Queen-Michelle-new-touchy-feely-protocol.html#ixzz1FnIo9fd8