Does Tumblr ever show adverts on your blog

1. Go to the Customize section after you log in
2. Click on the Theme tab
3. Click Use custom HTML

This will bring up a edit box that contains the HTML and tumblr code used by the theme.

Put the code for the tags somewhere between the opening {block:Posts} and closing {/block:Posts} tags.

To start off easy, let's put the tags at the bottom of all your post types.

Where you see the following line:

{/block:Posts}

Insert the following starting chunk to look like this:

    {block:HasTags}
       {block:Tags}
          <a href="{TagURL}">{Tag}</a>
       {/block:Tags}
    {/block:HasTags}

{/block:Posts}

1. Click Update preview in the lower right corner of the edit box (or it will update itself)
2. Click Save + Close in the upper right of the dashboard.

Refresh your tumblr blog and you should now see the tags display.

You can read more of the specific tags markup needed on the Tags section of "Creating a custom HTML theme"

I just went ahead and created a throwaway account to test this. Yes, once a subdomain is deleted or renamed, it becomes available again for registration on Tumblr.