It's pretty easy to install, just follow these steps:
1. Download:
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2. Open iFunbox (or iFile).
3. Navigate and drop hosts file into /etc/
4. Overwrite if prompted.
This modified hosts file will block pretty much all iAds, it doesn't apply to all the ads in Cydia, but I have seen a couple of them removed.
Note: This seems to crash safari after you restart with the new hosts file. Keep in mine, the hosts file works and it blocks all iAds, but it does crash safari.
UPDATED
Go onto Cydia > Add
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Works for all iDevices iOS 2x - 7x
Enjoy.