I just ran across this good how-to on replacing ads using a proxy server (in this case safesquid). A proxy server is a piece of software that requests web pages for other machines and then passes the pages along to the other computers. When the server requests a page it’s possible to make alterations and this is exactly what the how to details. In this case they construct a rule to identify ad blocks in the page (by the text that they use to call the ad from the adserver). After the block is identified it’s replaced with a custom bit of html.
Good how-to and I wanted to make note of it for future reference.