Obviously, the TOS doesen't say anything about that. But I wouldn't play with fire. Besides, many people here would change the Google ads format if they could. You should be able to design a new formatting with even better CTR.
This would also include ads throughout the site that mimic Google ads or otherwise appear to be associated with Google on your site. Although you may sell ads directly on your site, it is your responsibility to ensure these ads do not mimic Google ads.
If you have replaced ALL of Googles ads on a site then the TOS doesn't apply to that site anymore.
However, the real answer to this question remains the same - design some better ads.
I also want to do this. On my homepage the ads perform very poorly (3-5 cents) while in my interior pages I get .10-.75 It woudl be heaven for me to be able to replace my homepage block with 3 ads that earn me affiliate commission as opposed to a dismal 3 cents. To me its not worth my visitor leaving for 3 cents (especially without reading ANY of my content) but the ads look so nice there! grrr :)
What if i did something like center or right justify the self made link ads? Woudl this be enough of a difference?