I agree that editing the hosts file is by far the best thing for actual adblocking, but I like to have a manual adblocker in the browser, too. Not actually for ads, but so that I can "turn off" parts of pages that I don't want to deal with easily (for example, annoying, gross or animated avatars at forums).
Unfortunately it's not truly blocking ads, they're merely hidden. So you still have the lag in downloading them as well as the "xxx per site" download limit.
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Why do I see ads for a moment before they disappear? Why aren't all ads blocked?
Because of limitations in Chrome (or possibly my knowledge of the Chrome extension and DOM APIs), AdThwart can only remove or hide ads after they have been loaded; it can't actually prevent the browser from fetching them.
I've used adsweep (user script, not extension) for months and it works beautifully. Sadly the project is no longer updated, but it's yet to be a problem.
Is there an extension (could there be) for privacy protections similar to SRWare? I like SRWare ok but it'd be nice if these protections could be dropped into the latest Chrome.