I think ads become a problem when they become the focus of a blog instead of actual content. I personally like blogs with ads. If I enjoy reading a post I like to have the option to "leave a tip" for the author and click on an ad.
I think ads become a negative only if they distract from the content or if they diminish the blogger's credibility through inappropriateness or conflict of interest. I don't see a problem with most blog advertising.
Ads are not a problem as long as they are discreet. When they are the dominant feature, detract from the appearance, or the content is focused solely on ads, they become a problem and I tend to click away from those blogs.
As soon as ads become distracting, they're not good. I hate large ads, but not nearly as much as I hate animated ads. As soon as something starts blinking or moving or flashing, I'm outta there and I'm not coming back. In fact, I limit my time here because of the ads, sadly.
I have ads on my blog so obviously I think they are ok. Types of advertising that aren't good for a blog:
*Sneaky pop up, mouse over animated, get lost forever type rabbit hole links.
*Google adsense - they are just clutter unless you have a very targeted site and large amounts of traffic
* even nice ads are bad for a blog when there are just too darn many of them.
I like to think I maintain a good balance of ads vs content and if anyone catches me NOT having a good balance - call me on it, please.
Good question! I have tried running some ads on my blog, but without any success. I have tried to keep them discreet, which probably leads to my lack of clicks. Maybe too many bloggers have ads now, and they're too often the same ads that we see over and over. On the other hand, I have found some very helpful links from other people's ads. Like most others, I like them as long as the site doesn't become too busy and cluttered with ads.