For some time, the Adsense gurus have been advocating using images alongside  Google Adsense.  The general school of thought has been that this increases CTR and is compliant with the Adsense terms and conditions, particularly if a line is used between the images to differentiate between ad and image.

Well, Google have finally published their thoughts on the matter and many web masters should take note as it appears there will be a lot of sites that are no longer compliant and could end up in the Google sin bin.  Google have categorically stated that this practice is not an acceptable practice and is therefore non compliant.

Read the full Google Adsense and images report