This is another thing that im looking for and did make some research which i will be using for my new adsense project. All what you have to do is to parse your code.You will have to replace < with
and so on. If you want to save your time , An online parser is available . All you have to do is to parse it there and then paste it into your blog template. Put Adsense Ads between post at blogger did not violate their TOS. The adsense team said it ok:


You are permitted to make minor edits in Blogger Beta. However, please keep in mind that in general publishers are not allowed to alter the AdSense ad code for any reason. Once you've generated the ad code in your AdSense account pages, you may not alter any portion of the code or manually change the layout of the ads.

Thanks for your understanding.

The Google AdSense Team"

Basically there are 4 ways to put your adsense ads between post

Option 1 is good for image ads .I would choose a 250 x 250 square for it.
<div style=”float:left;”>Parsed ad here</div>

Option 2 is also good for image ads .I would choose a 250 x 250 square for it.As both of them support video ads
<div style=”float:right;”>Parsed ad here</div>

Option 3 works well with banners or half banners
<center><div>Parsed ad here</div></center>

Option 4 looks well in each format. I prefer a square for it.
This time, you will have to place it where the blog post end and the post footer start
<center><div>Parsed ad here</div></center>

For more assistance, here is the code which I have used.

<div class='post-header-line-1'/>
<div class='post-body'>
<p><div>&lt;center><script type=&quot;text/javascript&quot;><!--
google_ad_client = "pub-XXXXXXXXXXXX";
google_ad_width = 234;
google_ad_height = 60;
google_ad_format = "234x60_as&quot;;
google_ad_type = "text_image";
google_ad_channel = "2066577887";
google_color_border = "FFFFFF";
google_color_bg = "FFFFFF";
google_color_link = "333333";
google_color_text = "000000";
google_color_url = "6C82B5";
<script type=&quot;text/javascript&quot;
<div style='clear: both;'/> <!-- clear for photos floats -->