In my site I had placed few ads. The ads code was showing <rel="no follow". I edited the 'no follow' to 'Do follow'. Would this make any harm to my site?
If your PR is high enough, that will make your site will be commented by people who are making backlink to their site. No problem if you are willing to help them. But if your PR still low you can make it as link trade with the people who are commented on your blog.
First of all, you should use rel="nofollow" without space. No harm to your site, but it will be benefit to the sites you are linked to. Generally, placing nofollow links costs extra money, so it is common practice to do like johnsonp written.
From what I understand, you don't have to change "nofollow" to a do follow tag on the ads. You just have to remove the rel="nofollow" to make them do follow links. As everyone else said, there's no reason to do this with ads.
Basically, the meaning behind it is: No follow: Google will not crawl/go to the site you link to. This is good as it will improve you PR Do follow: Google will crawl it and give some credit to the site that you linked to as inbound link.
both no follow and do follow are useful in the search engine juice, even though no follow will not crawl your site but it is still useful and a part of the ingredients SEO formula!
It will benefit to the sites who want to put their links on it. It may increase the number of spam comments if you website is having high PR. Thanks