I would use one and build text around it. It just seems like it's destroying the flow of the page to me...
Also I would remove extreme and use google for tracking.. one less thing that detracts from the site.
Yes! I find this as an ideal position of google ads! As axs said maybe you should try removing the borders to generate more clicks cause many people may think that its actual content of your site
Yes, remove the border and give a try. Also try Horizontal Banner without border and sort the better ad.