It is for inner directory structure only, all modules URLs are rewritten and will look like this:

www.mydomain.com/m/module/action/parameters...

m - for modules
module - for module name
action - for action within a module
parameters - parameters to pass to module's action

But several modules uses old way, but URLs will be rewritten and friendly too, for the ads it will look look like this:

ads/action/parameters