Google launched their Interest Based Advertising a few months ago for Adwords and AdSense. It's optional. Instead of placing the ads on sites based on key words, they use cookies to compare the users browsing habits and place ads on sites that may interest them.

The site displaying the ads must have a "Privacy Policy" that explains why G is leaving a cookie. G has a sample "Privacy Policy" on their site that you can cut and paste. Anyone can opt out by going to the G web site. They don't use sensitive sites like porn, banks, or most login sites.