Google's testing ads in RSS or feed-distributed content. Google Puts RSS Advertising to the Test from eWeek has details, plus see AdSense in RSS - Explained from LonghornBlogs.com on how it is working for them.
Google AdSense for RSS running at Weblogs, Inc. from Jason Calacanis at Weblog has details on how and why his company is also using them. Google Tests RSS Ad Inserts at PaidContent.org has a nice recap of others commenting on the move.
Frankly, the end user doesn't care whether Google backs Atom or RSS -- and the DVD/Laserdisc analogy Hammock uses isn't really fair. Any tool I've seen is able to read either flavor of how feed content is provided, whether it be Atom or RSS. In other words, the laserdisc that Google backs are quite merrily read by your DVD player.
I'd agree with Dave that there's a lot more Google could be doing in providing feeds themselves beyond the Orkut Media feeds I mentioned earlier (which are in Dave's favored RSS 2.0 format, no less). But to suggest that Google is harming RSS by doing this ad move? I don't buy in.
Nothing I've seen so far said that AdSense ads will only work in Atom formatted feeds. Heck, Calacanis is putting out RSS 2.0 for his blogs. So if anything, Google's going to be helping a lot of people who do use RSS already.