Do the ads (banners, buttons) in my sidebar NEEDED to be related to my topic? Is it proper to post ads that I think is just interesting and in no way related to my blog. Can i do it or is it a big no no?
You can do anything you want. Ads that are related to the topic tend to get more click throughs though.
Generally the purpose is to attract targeted readers with the content and display niche specific ads based on that content. But as Mizaks said, you can do what ever you want...sites with huge numbers advertise everything, and are not niche specific, but they do target a specific demographics...you should at least follow that rule. Know your readers so that you are not spinning your wheels and wasting time and ad space.