I would love to see twitter take the other route: no advertising, charge for the service. Keep the quality of the experience high (which advertising will certainly not do), and it will be more than worth a dollar or two per year to millions of people. Offer a premium service to high-value individuals and businesses (quite what that offer is, of course, I'm not entirely sure).

Advertising online is, I believe, in the long run, going to be tricky to maintain as a source of income, even for content-centric sites. For service-oriented sites, such as twitter, I just don't think it's the right approach, especially given a nice API which allows the ads to be bypassed. OK, I'm sure plenty of people will disagree, but it would be really nice for a high profile social network to just try this and see if they can make it work (I know linkedin's model is essentially this, but I see them as a very different beast from the general interest communication juggernaut that is twitter).