The ads will appear on the home screen and on screen savers, but will not appear in the books themselves (thankfully!).
I am conflicted about this idea. We are bombarded by ads in our society, and throwing them into e-readers seems wrong-headed. We’re already paying for the privilege of reading on these devices, and over time, $25 doesn’t seem like enough money to save. I also think the price is strange in addition to not being low enough. I am with Michael Grothuas of TUAW: $99 might make the ad-supported Kindle more appealing, at least psychologically.
On the other hand, ads are ubiquitous, and I’m not sure if having them on my e-reader would bother me or not, especially if they were not in the books themselves. I block ads in my web browser using an add-on, however, so they must bother me at least a little, right?
In addition to the ads, other “special offers” include discounted Amazon gift cards and Audible books. How much do you want to bet the ads will be a much more common sight than the discounts?
Bottom line? The savings doesn’t seem worth it considering the potential for annoyance.