I bought mine with ads and to be honest, I barely notice they're there. If you leave wi-fi turned off for long enough the ads will run out and they will only reappear when you connect to wi-fi again. Worth the discounted price, IMO.
Yes, the ads are only mildly annoying, but when you think that you just saved $20, I think it's a good choice. I hope fewer devices do this going forward, but if that's what it takes to keep costs down, it's fine with me as long as the execution is similar. If I could buy my iPhone without ads I would likely have done so, but I can't so I don't know how much more expensive the ad-free version would be.
The ads at the bottom of the book list don't really get in the way, so I can live with them. As for the full screen ones when the device is asleep, I actually prefer them over the author pictures that displayed on previous Kindles. Those got old after a while, but the ads are always changing.
I got the $50 refurb deal a week or two ago with a TBD attitude towards the ads. While I'm generally opposed to the idea the implementation here is unobtrusive enough that I will not be paying to remove them.
(Spa day ads, while also poorly targeted for me are unfortunately effective when the wife walks by it)
I agree with the rest of the replies, the ads are not obtrusive, and in some cases they're actually good deals. I've got a few free audio books, and some discounted Amazon gift cards. Sooner than later, the deals will pay for the Kindle itself (unless you consider the fact that I don't usually need what the deals are offering).