OK, so this isn't a new idea, but I think the tech is now right for a useful and economical implementation.
1st: Your normal TV source, say a cable box or what not is plugged into the Ad-Be-Gone box. 2nd: the Ad-Be-Gone box is basically a PC, using a stripped-down linux OS, internet access is included. The spec can be pretty low, maybe even within the range of something like the Raspberry Pi. 3rd: On board sound/picture analysis spots ads (you'd only need a very small number of pixels to do the analysis on... the key would be to not tell anyone where on the image you're sampling from... otherwise those cheeky ad types will get around it). This is easy enough to do, I spot patterns in images that are pretty variable, and with poor signal-to-noise ratio, so TV ads should be easy. The patterns are updated from the internet in a similar way to PC antivirus programs update their 'definitions' also, there should be a 'this is an ad' button on the remote.
There will be options. A more expensive box will have a HDD where TiVo-style buffering may be employed, internet access will perhaps cycle through your Youtube subscriptions or display slideshows of kittens. The basic box however, will simply replace ads with a soothing picture of the Yorkshire Dales/Cotswolds/Lake District along with a live feed from BBC Radio 4.-- bs0u0155, Aug 20 2012 Ad banishment has long been an halfbakery theme.-- rcarty, Aug 21 2012 I have a team of geishas and kabuki actors to entertain me during ad breaks. When they're not around, I just start watching a programme from the start but 5 minutes after it begins, using my PVR's buffering, and flick forward over ad breaks catching up with live broadcast by the end of the show.-- hippo, Aug 21 2012 I like the idea of sampling and comparing to an online library. [+]-- MaxwellBuchanan, Aug 21 2012 Rub directly onto forehead.-- xandram, Aug 21 2012 We were with you until you mentioned kittens …-- 8th of 7, Aug 21 2012 I reckon I could sell a box that ONLY cycled pictures of kittens. I'd hate myself for effectively becoming a cute-porn merchant.-- bs0u0155, Aug 21 2012 random, halfbakery