The biggest problem with YouTube ads is not *when* they show up, it's *how* they show up. They are making it impossible to see the video which is just plain stupid. I have to turn the ads of to even see the video. The best way of implementing them would be the way theOnion has added video ads. They stream it before and after the video, not during one.
It's no secret that YouTube has been struggling to find the right advertising formula to gain revenue for their parent company Google.
So now they're turning to you, the viewer. YouTube has begun testing on a new advertising model, which allows viewers choose which type of in-stream ads they see...and the answer is NO; you have to watch the ads.

You can pick between pre, mid and post-rolls (beginning, middle or end) depending upon your preference.
The YouTube Biz Blog had the following to say on the advertising test...
We are constantly testing a wide range of options to find the right advertising format for the right content on YouTube, and we think giving users a say in the process helps our efforts.
With the data they gain from this testing, YouTube will be able to better optimize future campaigns, thus improving the chances for success.
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Well at least you can choose. Hopefully you can find ad that you can relate to the most and perhaps even act on it. Overall still better than no choice.