I know this is a zombie thread - but I wanted to post my experiences.
My site is banner and ad free, and they are going to stay that way. My site is also kinda small with @850 members - we just started in April. Instead of banners or ads, I have a donations link. Right now I make over $100 US dollars a month with less then 900 members. The donations pay for the server cost, plus some left over every month.
People like a banner free site. My members dislike pop-ups, and flashy ads & banners - so I give my members what they want. In return, the members make donations to keep the site banner free.
I had google banners, it took ten months of clicks to make what I do in a single month with donations. Banners are lame, they are a lame way of making money or supporting your site. Give your members what they want, and they will help support the community.
One thing I do, I post a monthly update, or semi-monthly update about the site. In this update I remind the members that donations keep the site ad and banner free, as well as where the site is going, number of members, new add-ons I am looking at, upcoming changes and so on. Kinda like a news letter but its posted in the forums - I do not like spam mail either.
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