Google makes it very clear that we are not supposed to put images next to AdSense ads in such ways that there’s a visual “connection” between the two. LINK.
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You can use images but you have to make sure it doesnt look like a adsense image, but i have seen many arcade web sites use the methods and i dont know any of them got baned yet.
From my understanding you must put a border between the images and advertisment and the images can not be directly by the advertisments, but they can be above or below the advertisments from adsense.
bu how bout adsense on top of a image?? i have it on many of my sites...can someone tell if this is allowed? ( http://www.nraged.com/forum/portal.php scroll down for the adsense ad)
On top of an image would be okay as you have it. The main focus of not having a image beside it is to not give the customer the wrong idea as to what the link leads to.
It could very well be that this type of image implementation will be made available within the Google Adsense Formats inventory by having seen various testing going on by Google themself with images next and on top of Adsense ads.
It could very well be that this type of image implementation will be made available within the Google Adsense Formats inventory by having seen various testing going on by Google themself with images next and on top of Adsense ads.