Update: This is an old post but is still applicable to those using the old classic Blogger template. Those using the New xml Blogger template should use the HTML/Javascript gadget (Page Element)
Where to paste the AdSense codes? This will depend on where you want the ads on your site. Probably the most prominent place to place it will be just below the header, like on this site. If so:
- log into Dashboard
- click the TEMPLATE tab
- look for the codes you see above and paste the codes where you see Paste AdSense codes here
Update: With the newly introduced Blogger Beta, there is now an easier way to put in your AdSense (and other, eg. Amazon) scripts, and to move them around. See Blogger Beta – adding advertisement and hit counter scripts