BFilter is a filtering web proxy. It was originally intended for removing banner ads only, but since then its capabilities have been greatly extended. Unlike most of the similar tools, it doesn't rely on blacklists (although it does support them). The problem with blacklists is that advertisers are always one step ahead. You see an ad slip through, you update your blacklist, and in case it didn't help, you add a new entry yourself.
Reviewing 1.1.4 (Feb 25, 2011)
fantastically useful
unlike timeless proxomitron, BFilter's developer still lives
better: BFilter can be fed AdBlock Plus format subscription filter sets
yay
the other loopback proxy ad filter
don't merely 'hide' ads: REMOVE THEM