I had the opposite reaction. Hearing this line, hearing about the ads on the lock screen, and seeing this slide (http://www.blogcdn.com/www.engadget.com/media/2012/09/amazon...), I immediately knew I wouldn't be switching from an iPad to a Kindle.
If the Kindle Fire implementation is similar, I wouldn't hesitate on that count. (There may very well be other reasons not to get one... We'll see when they come out!)
1) When you turn your Kindle off, there will be a full-screen ad.
2) When browsing books at the main menu, a small horizontal bar across the bottom of the screen will display an ad. You only come to this screen by choice, though -- if you were in the middle of a book when turning off your Kindle, when you turn it back on it will go straight to where you were in the book without showing this menu.
Since they never interfere with reading, they are extremely non-intrusive. I think they are personalized but not positive.
Interesting how you were willing to consider the device beforehand, but that was a deal breaker.
Or maybe it's a matter of principle...
I own a 3G Kindle that pre-dated ads. When I saw the ads on my wife's newer kindle I actually opted-in to add ads to my version. The ads are more attractive that the default screensaver and occasionally you get a really good deal. (like $5 Amazon credit)