Solved... in index.main.php

<?php
		// --------------------------------- START OF POSTS -------------------------------------
		// Display message if no post:
		display_if_empty();

		while( $Item = & mainlist_get_item() )
		{	// For each blog post, do everything below up to the closing curly brace "}"

			
			// ---------------------- ITEM BLOCK INCLUDED HERE ------------------------
			skin_include( '_item_block.inc.php', array(
					'content_mode' => 'auto',		// 'auto' will auto select depending on $disp-detail
					'image_size'	 =>	'fit-400x320',
				) );
			// ----------------------------END ITEM BLOCK  ---------------------------- ?>
			<?php
			  if ( empty( $shown_advert) || ! $shown_advert )
			{
			?>
			<p class="money">
			<script type="text/javascript"><!-- 
			google_ad_client = "pub-##%$&##*$**#";
			//After First Post
			google_ad_slot = "##%$&##*$**#";
			google_ad_width = 468;
			google_ad_height = 60;
			--></script>
			<script type="text/javascript"
			src="http://pagead2.googlesyndication.com/pagead/show_ads.js"></script>
			</p>
			<?php
			  $shown_advert = 1;
			}
		} // ---------------------------------- END OF POSTS ------------------------------------
	?>

An even better method, I think, is to display an ad block after every 3-4 posts

$i = 0;
while( $Item = & mainlist_get_item() )
{
    if( $i == 2 || $i == 5 )
    {
        // display ad
    }
    
    .........

$i++
}