I initially thought the screensaver and home screen ads wouldn't bug me, but I don't like seeing LivingSocial deals and Twilight: Breaking Dawn ads every time I turn the thing off.
It's pretty simple: go to "Manage your Kindle", click "edit" under "Special Offers," and then "Unsubscribe." They'll charge you $30, the difference between the subsidized and unsubsidized Kindle. No muss, no fuss, no penalty.
If you're too cheap to fork over the $30, you can also get rid of the ads by connecting your Kindle to your computer, finding the .assets directory (you need to enable viewing hidden files), and deleting everything in it.
As the message suggests, if you turn on wireless, the ads will come back until you delete .assets again. *Update: *a new method blocks the automatic download. I never use wireless because I sideload all my content, but if you're really into Amazon's content, this could get annoying.
So besides the wireless issue, why pay? I did it because I could afford to (it's still a dirt-cheap device), because I appreciate the company and value their products, and because I want to look at a beautiful, artistic screensaver without feeling like a cheat.
I love my Kindle- it's such a different experience from reading on a computer or iPad, with the constant temptation of email, YouTube, Facebook, pithy blog articles, and other short-form content. I have a single book loaded on it at a time (Neal Stephenson's Reamde right now), and like to curl up on the couch, distraction-free, remembering what it was like to be a kid with an attention span of hours at a time.
Hat tip: learned about the unsubscribe option via Shawn Blanc's excellent review of the device. I'm sure someone else already figured out the hacking option, but I'm proud to say I found it independently poking through the Kindle filesystem.