This is perhaps the most easy way:-). All what you have to do is to parse your code.You will have to replace < with and so on. If you want to save your time , An online parser is available . All you have to do is to parse it there and then paste it into your blog template.You can place any where into your XML template , where you want them.I'm sure no more XML errors would occur.If you are unable to do the desired work, feel free to comment.
This method was said ok by the Adsense team in case of New blogger.

Here is the letter

Hi,

You are permitted to make minor edits in Blogger Beta. However, please keep in mind that in general publishers are not allowed to alter the AdSense ad code for any reason. Once you've generated the ad code in your AdSense account pages, you may not alter any portion of the code or manually change the layout of the ads.

Thanks for your understanding.
Sincerely,

The Google AdSense Team"

It means that you cannot alter the code for changing Ad format ,colors or logo's but you can use the above method for Blogger XML.

There are basically 4 methods to put adsense between the new blogger posts.

Option 1--------------------Option 2 ------------Option 3

Option 4

For all of them to be implemented, you need to parse your code.

Option 1 is good for image ads .I would choose a 250 x 250 square for it.
<div style=”float:left;”>Parsed ad here</div>

Option 2 is also good for image ads .I would choose a 250 x 250 square for it.As both of them support video ads
<div style=”float:right;”>Parsed ad here</div>

Option 3 works well with banners or half banners
<center><div>Parsed ad here</div></center>

Option 4 looks well in each format. I prefer a square for it.
This time, you will have to place it where the blog post end and the post footer start
<center><div>Parsed ad here</div></center>

For more assistance, here is the code which I have used.

<div class='post-header-line-1'/>
<div class='post-body'>
<p><div>&lt;center><script type=&quot;text/javascript&quot;><!--
google_ad_client = "pub-XXXXXXXXXXXX";
google_ad_width = 234;
google_ad_height = 60;
google_ad_format = "234x60_as&quot;;
google_ad_type = "text_image";
google_ad_channel = "2066577887";
google_color_border = "FFFFFF";
google_color_bg = "FFFFFF";
google_color_link = "333333";
google_color_text = "000000";
google_color_url = "6C82B5";
//-->
</script&gt;
<script type=&quot;text/javascript&quot;
src=&quot;http://pagead2.googlesyndication.com/pagead/show_ads.js&quot;>
</script&gt;</center></div><data:post.body/></p>
<div style='clear: both;'/> <!-- clear for photos floats -->
</div>