i read about WordPress.com showing ads in our blogs some time before, but actually never saw some.
Now i realised that a post of my blog was totally cluttered with google ads, so i ended up with many times more ad-text than actual blog-text. And it was not a banner at the top or bottom of the blog, but rather in the middle of the blog-entry. Neither was there any disclaimer, that it is WordPress.com who earns money with these ads and not me.
I would accept discreet ads. I would pay for not having ads at all! But i can not live with these ads: http://img119.imageshack.us/my.php?image=ads1ys6.jpg
Then you will have to go elsewhere. Many people have complained about the number and layout of the ads on WP.com blogs. The staff’s definition of “discreet ads” is not, it appears, the world’s. They say regular readers don’t see them, that WP.com users don’t see them, but the fact is that people coming to your blog from a search engine almost certainly see them, and yeah, they’re ugly. Matt has said that they’re looking at a no-ads paid upgrade in the future, but there is no timeline on that of which we are aware.