A WebmasterWorld thread reports that the top blue AdWords ads have been removed from the Google search results page. But in fact, it seems to be a user by user setting. Some users will see the top blue ads and some users will not. What does it depend on? It seems it is based on your ad clicking behavior.
Check out this quote from the thread:
I spoke to my account rep. They are testing a new feature whereby when a user performs multiple searches and does not click an ad, the ads are all moved to the right side of the page. The rationale is that the user does not want to see the ads anyway and it lessens the chance of a poor prospect clicking on an ad. If you clear your cookies, the results will go back to normal.
Very interesting... First I heard of this.
I tested this myself by refreshing over and over again until the top blue ads dropped off and they did after about 10 refreshes for a search on ipod.
Forum discussion at WebmasterWorld.