While opting out of the iAd data collection program will stop Apple from collecting and analyzing data from your iTunes account habits, Apps that take advantage of the iAd program will continue to show iAds--but they may be less relevant to you. iAd advertisements will still use data from individual Apps to determine which ads are shown, though your personal data will no longer be used.
Keep in mind that you will need to have iOS 4 installed to opt out of the iAd data collection and you must opt out from each iOS device you own. Opting out also does not affect other Internet-based advertising that may be incorporated into Apps.
To opt out, simply navigate to the following link on your iOS 4 device: https://oo.apple.com/
If you receive an error message, "Unsuccessful Opt Out", you may need to wait a few hours and try again.