Business 2.0 has a post about the popularity of online email programs for delivering ads. I'm cross-posting my response here because I don't frequent their blogs enough.
Yeah, email sites rank among the top places for putting ads -- because they are applications with which people spend a lot of time. But all of that time means that the users are building up proficiency with the app and that translates to ad blindness. Ads in such applications are the easiest to ignore for several reasons.
First, a successful application will have a consistant user interface. That consistancy makes using the app easier, but it makes ignoring the ads easier too.
Second, because applications require multi-step interactions to achieve a goal, the user must ignore the ads in early stages of any work-flow in order to accomplish their task.
Combine the need to ignore ads with mechanisms to make ignoring them easy and you've got a recipe for wasting your ad spend.
The flip side is if you simply want to have your logo infront of people as part of a brand awareness campaign. In that case, you win, because email application engage users for relatively large amounts of time. But if you count yourself among the more common cases of those trying to get traffic to their sites, you lose.