Are contextual ads on a blog a good thing?

In one of my upcoming posts on Network Solution’s small business blog “Solutions Are Power“, I wanted to take a look at ad-serving software. But in order to do that, I’m going to need your help and get some of your thoughts about which ones are good and which ones aren’t.

For me, I’m trying out on TheLetterTwo.com a new startup that launched during the Web 2.0 conference & expo: Ad Village. If you’re not aware, this new service is similar to Google AdSense, but a bit based on recommendations and it appears somewhat contextual. As I said, I’m simply trying it out here in order to get some research – I already have some feedback & critics – but I’d like to review two parts of having ads served on blogs or for business websites:

• What value does Ad Village offer small businesses through it’s recommendation process and is it an easy buy-in?
• Does having contextual ads have any particular ramifications or is it just a means to get some extra information and businesses shouldn’t care what ads are on their site?

I’ll be doing some more research on this overall subject but wanted to gauge your reaction. What do you think about ads on a blog – not talking about sponsor banners but text ads and other material streamed by an ad network? List your thoughts below in the comments.