You can now show AdSense ads inside your block of blog posts, up to 3 times on your main blog page. This should definitely improve monetization for those of you using AdSense on your blogs, as this places the ads inline with your blogs’ actual content. The AdSense blog shows how it works, and here are a few example blogs using the feature:

• Dummies’ Guide to Blogger
• Movie Theatre Reviews

Or if you don’t want to click at link above, here is the full explanation that I’ve took 100% from the Google blog (after the jump).

Here’s all you need to do:

1. 1. Log into your Blogger account at http://www.blogger.com .
2. 2. Visit your blog’s Template tab and click on the Page Elements link.
3. 3. Click Edit in the Blog Posts section.

4. Check the box next to Show Ads Between Posts. You can then select how often you’d like your ads to appear, such as once after every post or once after every other post.

5. Customize the ads and click on Save Changes when you’re done.

Please note that right now, it’s only possible to insert Google ads using this widget, and not AdSense for search boxes or referral units.

For more detailed instructions, please visit Blogger’s Help Center. Lastly, don’t forget to check out Google blog optimization tips for ways to improve your ad performance.