Chris Coyier (of CSS-Tricks) has authored On Web Advertising, a brief piece with an accompanying screencast that explains just how online advertising works, and his opinions on it.
There is nothing “evil” about advertising. Creating content takes blood, sweat and tears. Creating products takes blood, sweat, and tears. Both deserve to be paid for that. Advertising makes sure they do.
Advertising can certainly be overdone though.
It’s especially worth a read if you’re new to advertising, or if you’re trying to explain how it all works to someone. I found the 45-minute screencast to be the most interesting part.