[TomGullen]

This reads a bit like hyperbole, this is just another ranking factor in an ocean of ranking factors. To react to this news by redesigning all your sites using this ranking factor as your primary focus would be a mistake.

Google's objective here is to reduce the ranking of bad quality ad ridden sites that attempt to serve as middle men between search results and a sale, low quality made for adsense sites. Anything google does to help rank these lower is good in my books.

[Pound6F]

Reducing ad ridden sites is great, but they are doing that in a roundabout way and taking down potentially useful sites in the process.

The point is not that sites with ads at the top should be as high in the results as sites without ads, but that using such a high-level heuristic (as they claim) is a poor way to lower (or raise) the rank of a page.

Google could also do a lot more work to show you WHERE on the page your search occurs. That would do a lot more to address the problem than just lowering the rank of pages where your search is lower on the page.

[resnamen]

Their instant preview feature tells you exactly that. The paragraph containing your search terms is marked by a red rectangle.