Take the search button below the text are and place the ad between them, if you can. But in my opinon, if you take my advice, much more people would click the ads but dont forget that it's a little bit annoying for visitors.
Ad some color to the backround and run text ad's 300x260 side and between text, make sure ad colors are the same as your page. get a twitter, facebook and digg account sync everything together. good luck
Do you think this huge custom google search right in the middle of your site looks fine? Perhaps, you could make it look a bit neater?