Here's a good excerpt about targeted advertising:
Google believes it can target ads so specifically to each user that the ads will been seen as valuable content, not annoyances. After all, people like to read catalogs -- collections of ads -- points out Google cofounder Sergey Brin. The more knowledge Google has about each user, the more it can make the online experience convenient and productive.See also my previous post, "Make advertising useful".
[CSM article via Brad Hill]