a) ...gives them a blank ad, maybe rigging the web server to serve up a 1 pixel image no matter what specific URL is asked for. They do not notice any error messages or see any banners.

This is more or less what Privoxy (new name for Junkbuster) does for me. Ad site graphics are replaced with a simple grey/white checkerboard that resizes to fill the original space. Very unobtrusive, but I know it's working. I have it chained with Squid and I'm quite pleased with the overall setup.

I think you can reconfigure it to a 1X1 graphic or something, but not sure what this would do to page displays.
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Jim


'Tis the exceptional fellow who lies awake at night thinking of his successes.