iLounge dug through that document and pulled out the relevant instructions, which you can read below. In short, however, users have to go to http://oo.apple.com/ on their device and make the changes there; that will result in "less relevant" adverts being shown.
To provide location-based services on Apple products, Apple and our partners and licensees may collect, use, and share precise location data, including the real-time geographic location of your Apple computer or device. This location data is collected anonymously in a form that does not personally identify you and is used by Apple and our partners and licensees to provide and improve location-based products and services. For example, we may share geographic location with application providers when you opt in to their location services.
Some location-based services offered by Apple, such as the MobileMe “Find My iPhone” feature, require your personal information for the feature to work.
Apple iAd opt-out: