Google's done it again.
When Google declared that publishers could no longer put ad units near images, it set the forums-a-buzzing. How far do the units have to be from the images? Does it matter if the images aren't related to the subject of the ads? Has anyone actually been banned for putting ad units near images?
Google didn't exactly clear up all those questions, but it did make its reasoning clear. Images shouldn't look like they're illustrating the ads, so keep them apart. If you cross the company's invisible line, you'll probably get a message telling you so.
In other words, forget hard and fast rules; use common sense and hope for the best.
Now Google has said that ad units can’t be placed near navigation links.
The original notice came in one line on its blog. You can read it here. Not surprisingly, that line got publishers worried and the AdSense bloggers had to rush out a clarification. You can read that here
Being Google, of course, the clarification doesn't say too much more than "be sensible."
The bottom line seems to be that if your ad units are in a sidebar, that's fine. If a drop-down navigation menu drops over an ad unit though, it's not. Users might miss the link and click an ad instead.
How Google knows whether the user intended to click the ad or not is a question I just can't answer. I suspect they have some fancy algorithms that notice lower-than-average conversions or higher-than-average clickthroughs.
Either way, don't worry about it. Unless your drop-down menus are landing on an ad unit.