if you want to change change images in time intervals you need to use timer and place timer and adrotator in updatepanel, and in xml file you need to give height and width for the ad, look at below code
Replace your code with this
XMA File
<advertisements>
<ad>
<imageurl>~/itc.gif</imageurl>
<navigateurl>http://www.itfunda.com/aspnet-ajax-ebook/show/46 </navigateurl>
<alternatetext> Go To Asp.net Ajax ebook </alternatetext>
<width>300</width>
<height>300</height>
<impression>30</impression>
<keyword>Asp.net Ajax ebook</keyword>
</ad>
<ad>
<imageurl>~/itcfunda.gif</imageurl>
<navigateurl>http://www.itfunda.com/jquery-how-to-ebook/show/45 </navigateurl>
<alternatetext> Go To Jquery ebook + video + sourcecode </alternatetext>
<width>300</width>
<height>300</height>
<impression>20</impression>
<keyword>jquery</keyword>
</ad>
<ad>
<imageurl>~/itcj.gif</imageurl>
<navigateurl>http://www.itfunda.com/jquery-essentials-online-training/show/41</navigateurl>
<alternatetext> Go To jquery essential training </alternatetext>
<width>300</width>
<height>300</height>
<impression>10</impression>
<keyword>jquery</keyword>
</ad>
</advertisements>
ASPX:
<html xmlns="http://www.w3.org/1999/xhtml">
<head runat="server">
<title></title>
</head>
<body>
<form id="form1" runat="server">
<div>
<asp:ScriptManager ID="ScriptManager1" runat="server"></asp:ScriptManager>
<asp:UpdatePanel ID="UpdtPnlAds" runat="server">
<ContentTemplate>
<asp:AdRotator ID="AdRotator1" runat="server" AdvertisementFile="~/AdvertisementsData.xml"
BorderWidth="1" BorderColor="blue" />
<asp:Timer ID="TmrAds" Interval="2000" runat="server" />
</ContentTemplate>
</asp:UpdatePanel>
</div>
</form>
</body>
</html>