In addition to the usual methods of blocking images and JavaScript based on URL patterns, the most popular ad blocker - Adblock Plus - has additional sophisticated mechanisms to hide ads on pages. These involve locating nodes in the DOM structure of the page, by any of their attributes (id, class, style, etc.) and hiding them. This technique is called element hiding and typically requires the use of tools like the DOM inspector or the HTML source of the page to figure out what nodes need to be hidden. Adblock Plus has recently made this simpler with the Element Hiding Helper. This utility allows one to pinpoint the element to be hidden visually and then build up the element hiding rule via a graphical interface. Ad blocking (or rather, ad hiding) made simple!
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BTW with Firefox3, the DOM inspector has been changed to be a standalone addon. So if you want it, you have to get it separately from addons.mozilla.org.