goodroi - 5:07 pm on Nov 16, 2010 (gmt 0)
welcome to webmasterworld scooterdude!
i dont think google is deliberately trying to reduce the visibility of their adwords. the instant preview only obscures the adwords when the user actively selects it. i doubt many users will want to see instant prview & adwords at the same time.
google is well known for testing countless versions of their serps. i would bet that they have tested it and noticed minimal impact on adwords so they went ahead with the current placement. i also would not be surprised if they tweak the instant preview display based on their constant testing.