I've had this question asked before, and it usually boils down to a couple possible reasons. It could be your site does not conform to the Adsense policies (see below). It could be there are no ads to serve in that spot or you may need to wait a little bit for Google to spider your page and assess the content so it can properly serve ads.

Here are the Adsense guidelines if you've never seen these:

Encouraging clicks

In order to ensure a good experience for users and advertisers, publishers may not request that users click the ads on their sites or rely on deceptive implementation methods to obtain clicks. Publishers participating in the AdSense program:

• May not encourage users to click the Google ads by using phrases such as "click the ads," "support us," "visit these links," or other similar language
• May not direct user attention to the ads via arrows or other graphical gimmicks
• May not place misleading images alongside individual ads
• May not promote sites displaying ads through unsolicited mass emails or unwanted advertisements on third-party websites
• May not compensate users for viewing ads or performing searches, or promise compensation to a third party for such behavior
• May not place misleading labels above Google ad units – for instance, ads may be labeled "Sponsored Links" but not "Favorite Sites"

Site Content

While Google offers broad access to a variety of content in the search index, publishers in the AdSense program may only place Google ads on sites that adhere to our content guidelines, and ads must not be displayed on any page with content primarily in an unsupported language. View a list of supported languages.

Sites displaying Google ads may not include:

• Violent content, racial intolerance, or advocacy against any individual, group, or organization
• Pornography, adult, or mature content
• Hacking/cracking content
• Illicit drugs and drug paraphernalia
• Excessive profanity
• Gambling or casino-related content
• Content regarding programs which compensate users for clicking on ads or offers, performing searches, surfing websites, or reading emails
• Excessive, repetitive, or irrelevant keywords in the content or code of web pages
• Deceptive or manipulative content or construction to improve your site's search engine ranking, e.g., your site's PageRank
• Sales or promotion of weapons or ammunition (e.g., firearms, fighting knives, stun guns)
• Sales or promotion of beer or hard alcohol
• Sales or promotion of tobacco or tobacco-related products
• Sales or promotion of prescription drugs
• Sales or promotion of products that are replicas or imitations of designer goods
• Sales or distribution of term papers or student essays
• Any other content that is illegal, promotes illegal activity, or infringes on the legal rights of others

Copyrighted Material

Website publishers may not display Google ads on web pages with content protected by copyright law unless they have the necessary legal rights to display that content. Please see our DMCA policy for more information.

Webmaster Guidelines

AdSense publishers are required to adhere to the webmaster quality guidelines posted at http://www.google.com/webmaste…..lines.html.

Site and Ad Behavior

Sites showing Google ads should be easy for users to navigate and should not contain excessive pop-ups. AdSense code may not be altered, nor may standard ad behavior be manipulated in any way that is not explicitly permitted by Google.

• Sites showing Google ads may not contain pop-ups or pop-unders that interfere with site navigation, change user preferences, or initiate downloads.
• Any AdSense code must be pasted directly into webpages without modification. AdSense participants are not allowed to alter any portion of the code or change the behavior, targeting, or delivery of ads. For instance, clicks on Google ads may not result in a new browser window being launched.
• A site or third party cannot display our ads, search box, search results, or referral buttons as a result of the actions of any software application such as a toolbar.
• No AdSense code may be integrated into a software application.
• Webpages containing AdSense code may not be loaded by any software that can trigger pop-ups, redirect users to unwanted websites, modify browser settings, or otherwise interfere with site navigation. It is your responsibility to ensure that no ad network or affiliate uses such methods to direct traffic to pages that contain your AdSense code.
• Referral offerings must be made without any obligation or requirement to end users. Publishers may not solicit email addresses from users in conjunction with AdSense referral units.
• Publishers using online advertising to drive traffic to pages showing Google ads must comply with the spirit of Google's Landing Page Quality Guidelines. For instance, if you advertise for sites participating in the AdSense program, the advertising should not be deceptive to users.

Ad Placement

AdSense offers a number of ad formats and advertising products. Publishers are encouraged to experiment with a variety of placements, provided the following policies are respected:

• Up to three ad units may be displayed on each page.
• A maximum of two Google AdSense for search boxes may be placed on a page.
• Up to three link units may also be placed on each page.
• Up to three referral units may be displayed on a page, in addition to the ad units, search boxes, and link units specified above.
• AdSense for search results pages may show only a single ad link unit in addition to the ads Google serves with the search results. No other ads may be displayed on your search results page.
• No Google ad or Google search box may be displayed in a pop-up, pop-under, or in an email.
• Elements on a page must not obscure any portion of the ads.
• No Google ad may be placed on any non-content-based pages.
• No Google ad may be placed on pages published specifically for the purpose of showing ads, whether or not the page content is relevant.

Competitive Ads and Services

In order to prevent user confusion, we do not permit Google ads or search boxes to be published on websites that also contain other ads or services formatted to use the same layout and colors as the Google ads or search boxes on that site. Although you may sell ads directly on your site, it is your responsibility to ensure these ads cannot be confused with Google ads.

Are you thinking the Adsense is supposed to display in the top feature area? It should actually create a new blog below the feature and above the post/sidebar. Try this. Go into Adsense and create a new leaderboard ad and copy the code provided by Google. Then activate a text widget in your top feature area and paste the code in it. Go into your theme options and set the number of feature columns to 1 and see if the ad shows up in your top feature area.

Umm.. why do you have a leaderboard ad in your sidebar?  I thought you were activating the ad in location 1, which is just below the feature area, but above the post.  Either way, the code that Google gives you when you create an ad in AdSense is just a little different that what I use in the theme because I need to be able to change the colors from within the ad code. So maybe that is the issue, I don't really know.

I did have another user who couldn't get the AdSense to work, so she contacted Google. They told her that before she bought the domain, it was used for porn and so it was blacklisted from the network. That's why it's hard to know exactly why ads don't show because it could be something that's completely out of your hands.