I'd wait on that till you have a larger readers-base. It's true that those rectangles in articles perform well, but they also annoy people. At this stage you don't want to loose one reader over ads.
OK, I will go back and implement the rest of the advice that was posted in a bit. I just wanted to post an update, it's already tripled my CTR to an even 2%! thanks guys Once I implement the rest of the suggestions, I'll post on any further advances or declines.
I recommend you add AdSense ads to your articles (blog posts) - Try to place an ad after the first or second paragraph and then continue your article.
Actually, inside the article (which is where my SE traffic lands) there is an adsense block. I can't do it in the main (the portion that reads out on the front page of the site, first 2 or 3 paragraphs) of the site because then it would have 3 adsense on the main page plus 4 more in each article. As someone here has already said though, in time, I will evolve those in the articles into the larger blocks...see how that works. Thanks!