If it's true that underlines are gone even with Enhanced text ads turned off, then that could be the single stupidest thing they've ever done. The whole foundation of Google's ad success was built on text ads and still is! They aren't doing this $&#! over on Google Search I can assure you. Ridiculous.
Maybe earnings will tank big time for AdSense and they'll put the underlines back, because if we're not making money then Google isn't either. Fail.