Sure, you can both advertise on Adwords and still have Adsense on your site. Just make sure you go into Adsense and filter out your own site's URL so those ads don't show up on your site.
thanks for sharing your answer webrehash i had the same doubt in my mind? to maximize the adsense feature for my site. thanks
You can..But in case Your adsense revenue is more than the amount you Spent for Adwords..Possibly you Will getting adsense account banned due to adsense arbitrage..
I have seen many sites using both adsense and adwords. But I suggest you contact adsense support to confirm.