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There are a couple of magazines I subscribe to in which the ads are nearly as interesting as the regular content, and well worth looking over. But I generally ignore website ads, which are often poorly targeted as well as being annoying.
Ads in a book would need to be at the beginning, at the end, in margins, or between chapters. Between chapters would probably be the most effective, but hardest to do from a technical standpoint-- an author would need to manually break up their text, which means providing authoring tools or requiring multiple files in the submission, which I suspect many authors wouldn't bother with. Margin ads would have the potential advantage of being somewhat context-sensitive (though any ads in books should be more carefully targeted than web ads), but could be really obnoxious. At least E Ink doesn't support color, flashing text, animations, etc.
As an example of poor web targeting, Yahoo mailing lists ("groups") started displaying ads on the home page for the list a couple of years ago. A Chinese Adoption list I was on started displaying ads for dating services emphasizing Chinese women. Bad choice. Perhaps an author submitting a text could click on the advertising categories they want to be included in. The more categories they choose, the more likely they are to get paid, but if they click categories that don't match their readers' interests, they could lose some readers.
Text-only ads, e.g. Google ads, though, generally rely on a link to more info. Such a link wouldn't work on a device not currently connected to the net. Maybe the ereader could cache items the customer clicks on, and display info when the next network connection occurs.
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