Sgt_Kickaxe - 9:22 am on May 16, 2010 (gmt 0)
Knowing where on the page something is doesn't require any fancy technical work on Google's end, don't worry about where in the code you place your ads (bottom of code with css positioning up top is fine).
It has to do with what loads in the visible area relative to your page scrolling. If an ad appears without scrolling it's in the visible area for that resolution. Google records this data when they visit.
I'm not allowed to link to particular sites to demonstrate this so try this. Visit "Jay Leno's Garage" and find a video (lot's on that site). Click on the little "embed" button code found in the bottom right of each video. Place the code on test pages, one up top, one at the bottom below the fold. look at the pages and notice how the bottom video won't even load until you've scrolled down to it? It's a nifty bandwidth saving feature, Google's tapping into it too. A+
As for adwords advertisers opting out of below the fold ads, meh, give a man enough rope and he'll hang himself. Their loss unfortunately becomes ours, adsense needs to move up page so find something else for down there or accept the losses.