Ad Placement
Google doesn't restrict where you place ad or link units on your pages as long as visitors don't confuse them with content or navigational aids. With the wide variety of formats available, ad or link units can be integrated into almost any page.
So where should you place the ads? Based on its tracking of publisher clickthrough rates, Google has compiled a heat map of where to place ads for maximum exposure and clicks. The "hottest" spots for ads are in the middle of content, whereas the next best areas are the ones near navigational aids. The heat map ad placement diagram shows it best—the darker orange areas perform better than the lighter areas. In general, of course, it's better for the ads to appear "above the fold" (high enough on the page so that most visitors see it without having to scroll the page) than to be buried at the bottom of the page.
One trick that has attracted a lot of attention lately is the strategic placement of related images immediately above or to the left of an ad or link unit. The images draw the visitor's attention. Google allows this technique as long as there's a border or some other clear indication that the ads are separate from the images.