Which is better? Well I am no expert but I would say that both have advantages and disadvantages but there is no good reason to only put one on your site!
it depends on your niche and design I suppose arcade websites works better with images but others content rich websites works better with text IMO
I think it depends a lot on the placement of the ads. Personally I do not like intrusive image ads, they make the content less visible. For an image ad my ideal placement would be right bottom corner, above the fold; or somewhere in the middle of the page, right or left. For other places, I would stick to text ads.