ken_b - 9:10 pm on Jan 26, 2012 (gmt 0)
I suspect the limit might be that at the max the ads can not take up any more space then the content.
That's partly based on my the last conversation with an Optimizization Team member who mentioned that if the (side bar) ads ran down the page past the end of the content, I might want to remove the ad block. Seemed that was more important if the ad was on the leftthan on the right. We were talking about a 160x300 block at the time. Maybe they knew what was coming down the pike.
In general though I wonder how, or if, they take ads like Kontera or other in-content links into consideration?