I do appreciate all the feedback. I don't feel any need to justify myself, but I thought that in the interests of being open about the whole thing, I'd share a few more thoughts that I've had over the past year or so (since I first started getting enquiries about advertising on this site), in order to explain a bit further the reasons why the adverts are in their current form.
One of the earlier requests from an advertiser to place ads on this site (not Kellys Basecamp) requested to include flashing,
full-page-width ads right at the very top of the index page
above the site logo/title (amongst other things). Needless to say, I declined, before even discussing how much they wanted to pay for it. After telling them what I
could allow up, I've not heard back from them. So lets be grateful we don't have that.

Restricting to text-only adverts reduces the value for many advertisers, and some (such as the one mentioned above) would not think it worthwhile at all.
Google AdSense/AdWords is an interesting proposition. But the value is not so good - or at least it is very difficult to determine. Google won't actually tell you how much you get per view/click, and how much they keep for themselves. I don't intend to play that game where I have no control over the advertising, the content or the prices.
Additionally, using Google ads would mean that I would have had to deliberately make the choice to start placing adverts on the site, whether advertisers had requested to advertise here or not. This is something I did not want to do - I was not going to place ads on this site without being asked to do so by advertisers.
Google gives you very little control over adverts too. It does a fairly good job of trying to intelligently figure out which adverts are applicable to the content, but it's never going to be as sensible as advertisers who choose their market directly. Eg, with the current scheme it would be easy for a local Tasmanian company to place ads that ONLY appeared in the "Tasmania" forum. This would be very affordable for them, and they would't be wasting money paying for ads that could appear not only on other forums, but on other sites altogether.
To make a reasonable amount of money from Google advertising, you need a LOT of those little text ads all over the site. I'm sure you've seen sites like that around.
Having advertisers who have chosen for themselves to advertise specifically at this site, means that they truly see the value that is here, and they can communicate directly with their target market. I hope that this also means they place adverts that are more likely to be of benefit to the people here. Highly targeted advertising is (I hope) better for both the advertisers and for the viewers, in that sense.
I do not wish for this site to be overrun with ads as is often seen on other sites, and I plan to restrict it to just two adverts on any one page (for logged in members). No offensive popups, no audio.
I have done a fair bit of research before commencing advertising here, but of course the comments and feedback you are all providing is of even more value, as there's no amount of research that can get the true feelings of the visitors and members of this site apart from actually doing it.

Some of you may also be interested to know that the advertising information that I send out to people who ask to advertise here specifically states that a smaller number of less intrusive adverts is better for everybody, and that a high quality site means better value for their ads. Advertisers do not get any special treatment on this site apart from the ads or promotions themselves. Ie, they have to abide by the same rules, and have no veto or censorship rights regarding content. I know of some sites where advertisers can veto any negative comments about themselves, and even stop some discussions about their competitors.
Note that the quality of this site for the members and readers is the first priority for me, and always will be (I actually 'use' this site myself too, not just administrate it). However, there are also other lesser priorities which still have to be considered. Such as, if people want to give me money, I'm not going to keep saying "no" or "that's too much! offer me less".

Deciding on what is good value for their money, and what is too detrimental to the quality of the site is a difficult task, but I'm hoping to achieve a reasonable balance.
EDIT: Sheesh, I can really blab on, when I get going. Must be the delirium kicking in - I'm at home, off sick with a nasty flu at the moment.