Like most ethics questions - if you have to ask, the answer is probably "no." I think you already know the answer to this one.
"AdSense participants are not allowed to alter any portion of the code or change the behaviour, targeting or delivery of ads." Source
Wow I know, everyone likes to see it these days! Wait, we are being sarcastic right? Anyway, to answer the question, no. Unfortunately, the Adsense ToS are too strict for nice things like that.
I have seen a site that had a floating menu div that by default just covered the ads by google portion but when u scroll it moved. Thats border line and depends if the google employee who reviews the case had his or her coffee that morning
only premium publishers don;t have to use "ads by google" can can show as "sponsored link" or something else. like the ads myspace shows. regular publisher accounts are not authiorized to alter the code or hide any part of it. doing anything funny with google code/ad will get one banned
Definitely not, and if you decide to do it anyways, I can guarantee you will get banned because someone will report your site.
Basically, if you get any powers over the ads other than through the setup panel, it is illegal. Google likes to be on top
Oki, since we already know an answer. How about people stop writing; "no, it's not allowed". I really don't get this