What are Feeds? :They are services that send you information or an update of an article as soon as it is uploaded to internet. It is a great way to stay updated in your favorite area.
A comparison between RSS and Atom is available here
http://www.intertwingly.net/wiki/pie...Atom10Compared

Why you want ads in your feed? :The Idea of adding ads to feeds came because feeds reduced the number of visitors to the site as all the information is instantly available to the subscriber through feed reader without visiting the website.

What type of ad? :You can add text links, banners etc which may be content related or general

How to add ads? :You can add ads from AdSense and bidvertiser by getting respective code form the sites and pasting it in the feed you wish to post