I don't block advertising banners…
… I block foreign code elements, Java and Flash. GIF animations are turned off: I will see the first frame only.
If a piece of JavaScript is hosted from the same hostname as the page, it loads. If it comes from another box, even the same domain, it gets blocked unless I deem it safe enough to unblock. (e.g. for this page, http://forums.theregister.co.uk/ascript.js will load, http://anotherhost.theregister.co.uk/ascript.js will not.)
I have no problems seeing advertising: a static hyperlinked image is perfectly fine. I might even choose to click on it. If it moves, I'll either block it, or failing that, I close the page.