Do you post adsense blocks inside blog posts on the single.php page?

Also what are your thoughts on doing this?

Personally I would rather post a picture related to the post than an advertisement. But that is just me.

I don't. I put in in the header. Example can be seen in the Mustang site in my sig but you already knew that :P

I've always found that adsense ads inside the post perform the best. It's not always pretty, however, so you'll have to judge the concerns of your readers vs. your monetary goals.

I always put them in the post. It seems to be doing fine by me so far!

:-)

I didn't use to but since I put the ads just under the title and before the posts, I've been getting clicks on a daily basis.