personally, I prefer links within a blog post....I guess it all depends on what your website is about. For example, for sports betting, having a bodog or other sports book link at the top of the page with live odds works very well. Also, Dating banners might work well too. Just keep testing until you find out what works for you!
The answer depends of many things. The banner, the website it's putted on, the place, the target group... I think that links will work better for driving traffic espetially in blog post as Canadian1974 has said. I think that banners serve other needs. You know Google? Sure you do! Know their logo? Of course! See - that's branding (well kind of ). I think that banners are a way to put your logo on a sites in you niche! You reach your targeted group of people! Thay may not click on that banner and land on you site, but thay (most of them) see it! They see your logo! The next time they see it they will know what is this! Well if you put a flashing "Congratulations! You win!" banner I guarantee you that the only thing you'll get of it will be hate and ignorance! So be careful with the banners!
Banners obviously are easier seen, so I'd think they'd be more effective, as long as they don't drive people away from the product.
It depends on your niche. Many web savvy people normally realise that a image banner is an ad and therefore may not click on it, but then with arcades you will have a lot of youngsters / teenagers that will see flashing image banner ads showing games and they are likely to click on them probably more than text links.
I have never had too much luck with banners. Seems like most people look past them when visiting a site.
Links are targeted more which should mix the design so that it should not look like a add it should look like the content so that it will be more effective
Yup for me "Images" more works than text link. people/human really like to click on images. by the way, dp have lot of potential designer with cheap and reasonable price.