Element making ajax call can call loading(targetElementId) method as below to put loading/icon in target div and it'll get over written by ajax results when ready. This works great for me.
<div style='display:none;'><div id="loading" class="divLoading"><p>Loading... <img src="loading_image.gif" /></p></div></div>
<script type="text/javascript">
function loading(id) {
jQuery("#" + id).html(jQuery("#loading").html());
jQuery("#" + id).show();
}