I found a greasmonkey script for blocking the top ad box within hotmail
and so I made my own simple script for blocking the ad box within
windows live spaces. perhaps you find it useful

// UserScript
// @name Windows Live Spaces AD Hider
// @namespace http://spaces.live.com/
// @description Hides top ad frame on Windows Live Spaces by kenonu
// @include http://*.spaces.live.com/*
// @include http://spaces.live.com/*
// /UserScript

(function()
{
document.getElementById("AdContainer").style.display='none';
})()