What is the "default ad" that you speak of in the options?
Well there's a few things behind this. First off let me tell you that this was originally written for a site I run, and the default ad is also a fallback for us if something goes wrong and we have to quickly remove our code. I also used it for testing when developing.
This template is easily editable in matthewh_ultimateads_mainad. Feel free to edit as you wish.
I also want to state that if you would like to remove branding but can't afford the $15 and you still want to have a clean
conscious. I'll allow to you just enable an ad location with the default ad and you'll be okay.
This default ad can also help if you're testing the add-on and you don't have any Adsense account.
Will the default ad be shown on the site even if the ad locations are unchecked?
Nope! Unless both ad locations (no matter how many, just any of them) are checked and the code box is left completely blank (including no spaces), the default ad will not show.